Money – it’s a crucial aspect of our lives. It is a critical factor in our personal and professional lives.
That cannot be understated. Without money, you can’t fulfill your dreams or even enjoy hobbies – without money; you’ll find it hard to eat and drink. Without money, could we actually survive?
Most of us are prone to wasting cash on pointless expenses to get a short term kick and even worst, many more people waste without knowing it.
Bottled water is brought instead of filtered water that can be filled up into a re-usable bottle at home; we throw money at designer brands, jewelry, and famous branded products.
We waste money on shoes and sneakers that we simply do not need. We buy expensive macchiatos instead of brewing from home.
We smoke, we buy food that we will only waste. We subscribe to cell phone contracts that might be far too expensive instead of searching around for value.
If money can do so much for us, why don’t we save and invest in the future? Why don’t we use money as a shield to protect our interests? People simply need to get more out of money.
We are far too addicted to the short term, though, and in some cases, it can be really tough to build a future with a low income, or if we are in debt.
Worry not, though, because even if you are in heaps of debt, you can still push your way out of it – it will just take time, effort and responsibility. You want to be the type of person who will have money to invest – money to spare.
The reason we leap into the spiel about water bottles and cell phone contracts a few paragraphs ago was to give you preparation for the first step in your bath to build yourself back from debt. You need to spend less than you earn.
Small Things can Make a Big Difference
If you can find ways to lower your expenses, you’ll be on the right path straight away.
For coffee, if you’re buying a five dollar drink every morning on your way to work – you’re going to be spending five hundred dollars over one hundred work days. Is that an acceptable expense?
A one-hundred dollar coffee machine and four ten dollar bags of coffee are going to save you a lot of money. Water could be another huge expense, a one dollar bottle of water twice a day for one-hundred days is two hundred dollars while a filter bottle can filter your water for free at the expense of about twenty dollars.
These two moves will save at least five hundred dollars over the course of a year, at the minimum. If your debts are high, imagine what that amount of money could do?
If you spend less than you earn, you’ll have a decent excess which you can use to pay your debts off, and this is something that you can do no matter the size of your monthly paycheck.
Tracking What You Spend is the Key
The best way to ensure you are spending less than you earn is to track your spending. It could be horrifying to learn how much money you are spending, but this knowledge is so beneficial, so you can identify key areas in which you can cut down your spend.
A budget can really show you exactly what you are doing with their money so keep track of your receipts.
If you struggle to assign money to pay your debts, you need to start taking control and if this is the case, put five to ten percent of your monthly earnings away to chip away at your debts and then use your monthly excess to pay off your debts.
This two-pronged approach can really work wonders for you, but you need to be dedicated. Along with all of this, review your monthly spend – rent, insurance, subscriptions – check if you need to spend as much as you are a month and if you can save money, make sure you do so.
Your budget should be a part of a solid financial record for you – keep a good record of your outgoing spend and your incoming money – a good accountant can use all of this to help you understand where you can save money and even if you are eligible for some tax credits.
This is especially important if you are a freelancer as you need to keep your invoices and could do with an accountant to help you fill your tax return.
Are You Dealing with the Lending Woes
The reasons people get into debt are mainly because of lending woes. Credit cards, loans, and payday loans can crush people very easily if they are un-educated about the consequences of not meeting payments.
In the case of payday loans, the interest can be almost as much as the initial loan, and if you fail to meet your payments, you can be damned to huge debts for a long time.
Credit cards are amazing tools when used well, but it is important to be wary of the credit limit and not assume that is your bank account.
It is extremely important to assess need here – if you do not need a loan, do not take it out. If you do take a loan out, meet the payment terms before anything else.
Payment terms and interest rates along with added financial penalties can be a true financial prison, and in worst case scenario, you’ll struggle to break free. Be extremely careful.
Don’t Kid Yourself – It’s Going to Be Tough
Fighting your way out of debt is going to be an enormous task, but if you are conservative and clinical, you may pay it off faster than you realize. Treat it as a task, and not the weight that it is.
These conservative spending methods will serve you well for your path after debt. If you can put five or ten percent of your salary away into a savings account, you’ll be able to build a decent fund within some time.
If you are to open a savings account, shop around for the best interest rates and then set up a regular transaction from your main bank account into your savings account. If you’re still saving money on spend – you can add this to your savings account as well.
This savings account will form the main base of your money and within time and care, this money might soon outgrow the benefits of your savings account.
Their Are Options – You Just Have to Look For Them
You have a variety of options here and could look to invest your money in the stocks of companies being floated on the stock market, you may choose to invest in bricks and mortar with a property investment or you may even choose to buy bonds.
It’s important to fully educate yourself on these areas to choose the options best for you as you do not want to invest in an area that will not reward you. Market experts are all around you and can help you put your money into places where it can grow.
Trusting the stock markets might be hard, but your trust is needed to build the economy of the future. Ideally, your conservative habits will help here, so you aren’t taking uneducated gambles with your hard saved cash.
Property is something amazing you can invest into with some great benefits.
If you have the money to secure a mortgage on a site be it commercial or a new launch project for residential sites, you can rent it out to tenants who will not only pay for the mortgage but grant you an excess that you can put directly into other investments.
Being a landlord does come with a number of responsibilities, though, so make sure you look after your property and the tenants paying you!
It’s important to not put all your eggs in one basket though. Diversifying your investment portfolio will save you should something fail – and as well all know, that can happen.
Spreading your savings across stocks, equity, bonds, and property is a good idea, and you should look to offer some money to a treasury fund, so you don’t have to manage everything yourself. Investing takes time, but putting your money to work has some amazing benefits, and hopefully, debt will seem like a thing of the past.
All it takes is care and a conservative attitude, and you can bounce back from even the worst financial situation – no matter how much you earn, track your spend and devote the excess to paying your debts off or building up a savings account.
It’s important to be responsible at all times. Manage your finances with care and make sure it takes a place of true importance in your life. The consequences are not worth dealing with.
Be responsible when signing up for credit cards and even more responsible with actually utilizing them. Make sure you don’t jump for the first investment opportunity available and do your research.
With your money, take time and care and you’ll bounce back from debt into a profitable future.