You Are Earning Money. But Are You Managing It? Is Your Money Working For You Or Working You Over?
Financial Management Is A Thing You Should Learn Early In Life.
Managing your weekly or monthly finances can be a daunting task and still at the end you may have low savings or no savings at all. A lot of people believe they’ll need a particular amount of money for their retirement but end up saving far less. If this fact has scared you, then it should because given the environmental conditions we live we are going to need each and every penny. Scared? Don’t be we got you covered, not financially of course. Here are some good habits you better incorporate in your life, so that you lead a happy and stress free life.
1. Save Before You Spend
If you are one of those people who spends first and then saves the leftover, you are trouble my friend. Because the amount you end up saving might not be sufficient enough for future expenses. Your best option is to create a separate account and set aside a part of your salary in this account. These savings can be used to go those foreign trips, buy a car, get membership of that fancy golf club, wedding or any other luxury you intend to indulge in.
2. Invest Wisely
First of all, educate yourself on various investment options. The financial world is so much more complicated and deceiving. There are loads of Ponzi schemes out there and you need to protect your money from these kinds of threats. Don’t gamble your money in stock market on a whim. Get an expert’s advice. Investigate the fundamentals of the company, their product and their alliances. A safer bet would a mutual fund. Mutual funds are bunch of stocks collected together to minimize the risk. A good insurance cover can help through a crisis. You get a large sum of money for an emergency.
3. Get Rid Of Debts ASAP
Getting rid of the debts which cost you heavy interest can be relieving. Debts can become major part of your expenditure and make your finances look weak. This task can be difficult but all you need is budgeting and self-control. Writing down your expenses and making payment in cash can save you from lot of credit card debt. Try to treat your credit card as cash. Wise men have said, “Only spend the money you have and not the one you expect.”
4. Emergency Fund
When life gives you lemons make lemonade, but you need ingredients to make lemonade and for that you need money. A lemon could be anything sudden illness, car breakdown or you may need to quit a boring, unproductive job. The point here is you can face a crisis more confidently if you are financially able. If you have an emergency fund set aside you need not worry whether life gives you lemons or watermelons.
5. Plan Retirement
You may think you are quite young to plan a retirement. But hear us out. They early you start, the less amount you need to set aside. Many companies offer their employees with a retirement plan. In this plan a portion of your salary is automatically transferred to a saving plan. This way you are not tempted to skip an installment and learn to manage expenses accordingly. Once you have enough money in your retirement fund you can even retire early to pursue your dreams. You’ll be able to lead a healthy and relaxed life post retirement.
Do you think we missed out any crucial financial tips, then do let us know in the comments. Share this knowledge with your friends, colleagues, loved ones, who you think need financial advice but are afraid to say so.