Did you know that how you spend or manage your finances has a huge impact on the quality of life you will lead in the future?
Well, that’s right!
A smart saver or a shrewd investor will be more likely to lead a financially satisfying lifestyle in the future, compared to someone wasteful, according to the four pillars of financial management. And much as money-saving tips or planning one’s financial future are thought in the school of life, the basics are fairly straightforward. They are simple and ideally never change because they are pegged on one’s financial habit.
The golden rule regarding financial planning has got nothing to do with how much money one has or the size of his/her paycheck. It, instead, has all to do with your psychology, habits, and the values you choose to abide by. If you choose to save a portion of your earnings and effectively work on the psychological aspects of your habits, trust me, your future will be secure.
However, to get you started, here are some six rules on financial planning to help improve your financial life.
Study Your Financial Calendar:
If you were to analyze how you spend the day, you would discover that there are those moments when you are blatantly lazy and non-resourceful. The same is true with your financials – there are those habits that steal your money.
But since you would like to secure your financial future, some sort of financial insurance will have to be put in place. Simply put, sit down and identify how you spend your finances on the degree of urgency. When you encounter nonessential tasks or those that are irrelevant, find a way of getting rid of them.
Try to identify when your productivity levels are at its peak and how you can get a maximum out of it and when you need to cut down on the needless expenses. In the end, you will be a financially conscious person who knows what’s worth fighting for and what’s not.
Regularly Set Aside a Portion of Your Time for Your Finances:
Your journey towards a blissful financial future can’t take off unless you also put on your best productivity habits and techniques. And the first chapter is to be regularly reviewing your finances and how you are faring on. It’s a task that can take a couple of hours of your day, once a week, but certainly worth it!
First, identify a list of repetitive and one-time financial tasks to handle and review regularly. You will then identify a time of the week when you work on the list, analyzing those that you can do away with. By so doing, you will be conscious of where your money goes and if there’s a way that you can increase your earnings or reduce your spending. Learn more about financial planning here.
Create a Budget and Stick To It:
Ever wondered why a car comes with windshield wipers even though these gadgets will only be used whenever it rains?
A cautionary measure when it rains while one is on the road, right?
Well, the same is true with having a budget – you will never know when need to buy something that wasn’t originally budgeted for. But with a budget detailing what’s available for spending and what to buy, you will exercise some power of what not to buy.
Ideally, it will serve as a roadmap of how much you require for your regular expenses and thus how much you need to attain your spending threshold. The best thing with budgeting is that no particular skill is required when coming up with one. So, create and stick to your budget so that you not only stay clear of impulsive purchases but also have a clear and transparent knowledge of your financial situation.
Track Your Spending – Spend LESS Than Your Earnings!
It is a serious financial sin to spend what’s in excess of what you earn. The consequences can be dire and can even lead to a spiral of debt that you will never get out of. In the same breath; if you spend an equivalent of what you earn, your financial future will be doomed and any emergencies can knock you down.
So, the rule is simple; spend a fraction of your earnings cumulatively so that you set aside what to save. The best way to spend less than what you earn is to cut down on what you waste or reduce your expenses altogether. Remember, the more you save, the better your financial future!
Let Your Money Work For You!
Much as saving for the future is the way to go, it would be equally smart to start a business. The rich never got to where they are by saving, but rather by taking the leap of faith and investing. As for you, it won’t really matter how big or small you start provided it churns out some reasonable amounts of money on the side.
Do not be all about socking your cash in a low-interest savings account time and time again when a financial planner can be of help. There’s no better way of preparing for the future than having an investment that keeps making money, even when you are away. You can also invest in yourself, perhaps by getting an extra degree that would spring you up to a higher paycheck.
Have a Set of Money Management Resources to Follow:
- Which mobile app do you use to track your investments?
- What is your favorite financial planning software?
- Or, who is your role model on Facebook, Twitter or YouTube when it comes to analyzing your finances?
You don’t have to plan your financial future on your own yet the web is awash with resourceful individuals whose expertise in financial management can’t be disputed. These financial gurus regularly post on social media insightful and informative posts on financial management and how one can plan for their future. They often dish out free expert advice, free of charge.
The best thing about having such notable resources also is the inspirational stories about those who dared and succeeded. They will keep you going through their regular and inspiring stories. You must, however, pay close attention to what they recommend and their kernels of wisdom that could apply to your situation.