4 Steps to improve your finances without relying on luck
On St Patrick’s day, everybody wishes for the rainbow that takes to the pot of gold. Antoine de Saint-Exupéry said, “A goal without a plan is just a wish.”. Therefore, if you make a plan, the pot of gold can turn from a wish into a goal. With that in mind, we brought 4 steps to be followed that will boost your personal finances and avoid money problems for the rest of your life.
Get organized
The first indispensable step to have a great financial life is getting organized. You should know exactly how much you are earning and keep track of what you’re spending.
How to get organized?
Start by creating a budget. John C. Maxwell explains budgeting by saying, “A budget is telling your money where to go instead of wondering where it went”. So, make a budget and define where each part of your income is going to. Not only that, have the discipline to stick to the budget and don’t sabotage yourself.
Also, create a financial calendar, set reminders for the important financial tasks such as checking credit report and paying quarterly taxes. Being always up to date, on the long run, will add up to relevant money save.
Allied to that, avoid debt as much as you can. Thomas Jefferson said “Never spend your money before you have it”. Credit can make sense in somes situations, if used responsibly and effectively. But, if it comes out of control, major losses can happen in the future. So, make sure you understand how credit works and, when you use it, do it wisely.
We remember that “A goal without a plan is just a wish.” Therefore, define your goals and make a savings plan in order to achieve them. One way of doing that is using the 50/30/20 rule, by dividing your income spendings 50% on needs, 30% on wants and 20% on savings.
Increase your income
After getting organized with your finances, you can start thinking on ways to earn more and potencialize your financial growth. Even if you budget and save, there is a limit on how much you can do that, and it’s dictated by how much you earn. With that in mind, you should think of ways to increase your income and we have some ideas to help you on that process.
First, you can keep improving on whatever it is that you do. For example, keep studying, buying courses and specializing on the niche you work in. If you have a business, keep applying money and effort for it to grow on success.
You can also start a side hustle that will boost your income in parallel to a main job. Think of a talent you have that can become a new way to monetize. After that, take it seriously and break some sweat. Who knows, maybe a hobby can turn into a source of income and, in the future, into your new main job.
Lower your expenses
When people increase their income, they naturally increase their expenses as well. When this happens, purchasing power may increase, but not financial security. If youwant to look at finances responsibly, priorities always need to be well set. Therefore, avoid impulse purchases, they can drain your bank account before you even notice. Kin Hubbard said, “The safest way to double your money is to fold it over and put it in your pocket.”
Also, try to cut back on expenses. Suze Orman said, “Look everywhere you can to cut a little bit from your expenses. It will all add up to a meaningful sum’. It’s true that nobody needs to turn into a cheapskate and become obsessed with every little way of saving more money, but paying attention to some unnecessary expenses and cutting them off can be really beneficial.
Pay yourself first
You are your greatest investment. There is no asset or stock that can earn you better returns than investing in yourself. This means that developing skills and education, growing in knowledge and investing in your own business have a greater power to increase your income than any real estate fund. What will make you rich is earning more, and you do that by adding value to people life. The more value you add, the more you will make.
That put, you still should now something about investing and how to make your money last. Take responsibility for your financial education by dedicating some time to study every week. Keep in mind what Benjamin Franklin said, “An investment in knowledge pays the best interest.”
You can also take a look at Inflow for some finance professionals that can help you out.
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