Friday, February 17, 2017

How To Stop Taking Chances With Your Finances

None of us know what’s going to happen in the future, but that’s exactly why we should be planning for it. You might be raising an eyebrow in confusion, but this makes perfect sense, if you really think about it. Unexpected expenses or money troubles can arise at any point in our lives, and they usually do for the majority of us, but it’s about the possible routes out that we’ve paved for ourselves which determine how we deal with such situations. It’s about planning for multiple eventualities and always having a safety net, because time can be a funny thing where money is concerned.


Of course, in an expensive world, it’s all very well and good to promise yourself that you’ll look after your finances, but the cost of living can quickly put a dent in a healthy-looking bank account. Still, there are always ways to better safeguard your money and stop wasting it away on unnecessary things. Here are some tips for the anxious spender or those of you who simply don’t know how to protect your wealth. 

Be strict with yourself each month. 

Yes, I know that brand new drone looks like an enticing new gadget, and I know that restaurant down the road is beckoning you because you’re tired of cooking, but sometimes restraint is all it takes to completely secure your financial future once more. You likely have a substantial amount of disposable income every month, as most people do if they’ve ensure their rent and bills fall well within their spending means, but the majority of people who end up struggling to make ends meet simply dwindle away their excess funds on excess luxuries and non-essentials. 

The key is to be smarter with your spending every month. Your rent is most likely fixed (though this obviously isn’t relevant if you own your property), and, if you’re smart about how you use your heating, water and electricity, you’ll be able to work out another rough figure for how much you spend on bills per month. Once you’ve added all this up, you should have a clear figure for the excess income you have leftover each month. Write this figure on a whiteboard or stick it on the fridge. Get an idea of how much disposable income you have after necessities, and keep track of what you buy throughout the month. It’s as simple as that. Making a budget and ensuring your expenditure stays below your income doesn’t have to be an impossible task. You just have to know which luxuries you can afford and which you cannot.


Think about the future. 

I know the future is scary and distant, but you have to think in the long-term alongside keeping your money safe today. Whilst we can’t completely plan ahead, given how unexpected life can be, we do have some element of control and foresight. For example, you should note that the length of time you work is far more important than your investments when retirement planning because a longer career means you’ll make more money for a shorter retirement. Thinking about things like this today means that you’ll set yourself up for a more relaxing financial tomorrow. You’ll thank yourself - trust me.


If you have debts, pay these first. 

I can’t think of any advice more important than this. Don’t take any chances with your finances, and certainly don’t get yourself in deeper debt if you can handle it now. Small debt isn’t scary, but big debt can be. If you only owe a small amount of money, then all your disposable income should be heading towards paying that off today. Once you’ve done so, then you can return to buying luxuries every month.

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