While multiple factors impact our financial success, your parents, job, partner, etc. there are also tried and true principles that are sure to work when practiced daily. These have been tested over and over again and quite frankly — THEY WORK.
Here are four that you can start to use immediately.
1) Don’t spend what you don’t have. Overspending leads to debt, and debt prevents you from getting ahead in life — it’s just that simple.
The most effective way to ensure you don’t overspend is to assign every hard-earned dollar a specific purpose through a budget: for example, $250 for public transit, $500 for groceries, $1,500 for rent. If you don’t have money set aside for something you want or need today, you’ll have to save up for it.
You might be surprised to learn that self-made millionaires cite living within a budget as one of the keys to their continued financial success, even after they’ve achieved millionaire status.
2) Make more money each year. Increasing your income, even by only a small amount, will help you keep up with, and hopefully beat, inflation. Popular techniques to earn more include:
· Getting a raise or promotion through work
· Starting a part-time side-hustle (e.g., freelance work, tutoring, & of course investing, etc.)
If you’re not getting ahead with the work you’re currently doing, don’t be afraid to update your skillsets by taking relevant courses or training.
3) Save AT LEAST 10 percent of everything you make. Before your hard-earned cash disappears or ends up in someone else’s account, take at least 10 percent and set it aside for saving and investing; trust me — you will thank me later.
Also, if your employer offers a retirement plan, this is even easier to do because they can make the deduction from your check automatically, so you don’t have to do any additional work. If your employer doesn’t offer this, then it’s up to you to set up automatic transfers, don’t fret there are a number of credible apps & banks that provide such services.
Speak to a qualified, and highly recommended, financial adviser to set these accounts up.
4) Only use good debt. Student loans and mortgages (and sometimes business and investment loans, too) are classified as “good debt” because they are used to invest in your future. Any other types of debts are harmful to your financial health — credit card balances, consumer loans, payday loans, and the like — and these should be eliminated quickly and avoided in the future.
Happy saving, My Friends
Kevin aka FitCapitalist
P.S. As with any financial advice, please consult your Financial Advisor for your circumstances.