The ever-elusive financial freedom is what so many people strive for, yet very few attain it in a lifetime. You’ll find multitudes trying to look for easy methods of getting rich quickly.
If one thing is for sure, it’s that financial stability doesn’t happen overnight. It is a gradual process that requires discipline, dedication, and sacrifice to attain it fully.
Here are simple ways to begin leading a more financially conscious lifestyle, one that will ensure you live comfortably, way past your retirement age.
Expand Your Financial Literacy
Perhaps in the past, you’ve not been paying closer attention to your financial status. You assume that so long as the paycheck keeps coming through, you’re secure. However, this insistent habit of ignoring your finances can quickly result in deep debt. If you have a continuous behavior of taking loans and credit, it may be hard to be financially healthy.
Instead, make an effort to remain aware of your financial surroundings, including having relevant bank information like your statements and the applicable terms. You should also understand your tax rates and become more interested in various salary cuts.
Taking-in valuable financial lessons require doing a lot of personal research, but just like any other course such as medicine, online classes offer easier comprehension.
Start Saving More
Although life throws different circumstances that force you to use more money than you initially anticipate, you must ensure you save a little from your income/s. A life of continuous saving is essential as it ensures you remain self-sufficient even when tough times come.
For example, if you lose your current job having some cash at the bank or somewhere accessible will help you stay afloat as you look for other work options.
Train yourself to start saving more by:
Recording your Expenses
While it’s impossible to escape life responsibilities that demand your money, you can have better control if you keep track of how you spend it.
Segment your expenses, separating the essential items from the non-essential ones. Ensure that things like rent, grocery shopping, and mortgage take priority in your expenditure.
Keeping track of your daily, weekly, and monthly usage through apps, statements, and relevant software helps eliminate bad spending habits.
Budgeting for Saving
When saving becomes a priority in your life, you begin to experience its benefits and develop an interest in saving more.
Depending on your income, you can save from 10-15 percent of your income.
Saving without a goal lowers your morale, making it hard to remain consistently disciplined with your money over time. However, saving with a purpose allows you to be more intentional on the staff you use your money on.
For example, having a goal of upgrading the kitchen in your home gives you the motivation to spare every coin.
Always have a goal for saving to avoid squandering the money that you work so hard to safeguard.
Expecting the Worst
If there’s one thing that catastrophe teaches you, it’s that saving is vital for survival. When you live expecting the worst while hoping for the best, you become more aware of your money use and save more.
Pay Off Debts
Debts, although easy to borrow, are challenging to repay within the given timeframe. Fast accumulating interest rates are often the last financial blow before your credit score lowers and you become bankrupt.
Make a list of all the debts you owe to outside parties. Arrange this list from the highest debts and most urgent debts to the least demanding.
Clearing the Heavy Debts First
Begin reducing the surge of debt by tackling the vast loans first. Paying off the more significant debts improves your credit score and prevents the hefty interest rates from taking up any more of your money.
Opting for Balance Transfers
Instead of using your high-interest rate card to obtain a loan you can confidently repay with a short duration, opt for a zero-interest balance transfer card. However, borrowing using such a card is demanding because you must pay within the specific timeline or risk paying significant interest.
Direct Work Benefits to Pay Debt
When you have several loans demanding your attention, it is more effective to try and eliminate them in every legal way. This may mean directing work bonuses and extended incentives (in cash form) to paying off debt.
Winning the financial stability battle requires patience as it is not an overnight thing. Often you face constraints that lead you to poor spending habits. If you desire to lead a more financially healthy life, use the above tips to create a solid foundation.
KT is a digital nomad who quit her job, bought a ticket somewhere, got a tan, fell in love with mother nature and she would never return to the normal life that society dictates. You can also connect with her on YouTube, Facebook, Twitter, and Instagram: @pinaynomad