Majority of us think about financial stability as a distant dream which will never be realized. In the absence of a financial teacher, we often end up finding the wrong advice at the hands of amateurs that lands us in trouble. Don’t worry. We have compiled a list of real-life practices that will push you towards earning and managing money smartly.
Take control of your finances
You have to get hold of your finances instead of thinking about someone else’s situation. You are not supposed to compare your lifestyle with others as everybody is living a different life and have their struggles.
Push out all the negativity and focus on personal financial growth. You have to earn enough money to reach your goals irrespective of your position in society. Also, do not depend upon the so-called “sure shot ways” to become successful. You are writing your own story, and none can direct its outcomes until you do not share control.
Create your method, plan to achieve a goal, and work for it religiously, nothing else matters.
Don’t indulge in emotional spending
Impulsive expenses are one of the biggest hurdles in saving money. Most of us spend on eating and shopping to feel good about ourselves. But that fake satisfaction is momentary, and we lose precious sums of money that could have been used in something productive. Acknowledge your priorities and spend accordingly. Although you must spend on fun and leisure activities yet, plan them ahead, or the thought of saving money will run down the gutter.
Prepare a budget
Yes, budgeting is the only savior when it comes to money management. It guides us in spending on things that require our investment. Also, it helps us in tracking our money, which becomes essential, keeping in mind our habit of emotional spending.
Make sure that you use your money to pay all the important bills first like car payments, utility bills, mortgage, food, and transportation. You must engage fifty percent of your income over essential channels stated above, Note- As a rule of thumb don’t spend more than thirty percent of your income on mortgage/rent.
After settling all the necessary liabilities, you should save ten to twenty percent of the remaining money for your future in a retirement account, savings account, and an emergency fund. The remaining money can be spent on entertainment and shopping; nonetheless; you should use this amount intelligently. We must aim for spending purposefully, and in return, our money will work for us.
Use your time efficiently to earn more money. Earning extra money will put us a step forward in achieving our financial goals. You can use your skills to make more money without hampering your original job like running dancing classes, working as a trainer, or managing treks on the weekend. Remember, you can save as much with a single job, but a side job will provide you ample money for savings and investment.
It is better to do something you are already good at as there will be no learning period. However, you should save this money either for investments or for improving your high paying skill.