Have you ever thought about how making some money-savvy decisions today may define your tomorrow? We are so often entrenched in routine worries that we hardly have the time to think about future financial security. At the least, the majority of people don’t think much of it beyond making some savings.
Of course, using every trick to save money is a smart thing to do. However, according to statistics, the average American family’s savings are anything but impressive. Therefore, you need to think beyond setting aside a few hundred dollars from every paycheck. Instead, you need to make decisions that will keep those savings grow or help you avoid major expenses in different ways.
The following ideas can help you take the first steps in the right direction.
6 Best Money-Savvy Decisions That Will Benefit you In the Long Run
1. Start micro-investing
Micro-investing is, quite possibly, the single best example of a money-savvy decision you can make now that will greatly benefit you in the future. It doesn’t appear impressive if you look at the numbers you manage to make from micro-investments. After all, what’s a few dollars when you want to build a fortune?
But over time, those few dollars multiply and your investments turn from micro to something much more decent. This may not be the road that will give you a six-figure bank account. However, it’s definitely something that will alleviate any financial strain you are under.
Also, the best thing about micro-investing today is that it’s easy. You don’t even need to research investment opportunities in order to use a small portion of your savings for this. Simply download and start using an app like Acorns. It will do all the hard work and soon you’ll see your balance growing. Most importantly, this can help you understand investing better. Therefore, you’ll have a higher chance to succeed if you start making bigger investments in the future.
2. Buy a home warranty
Making money-savvy decisions means to not only find ways to increase your wealth but also avoid losing it. Therefore, you should also start using services that can help you avoid big and unexpected expenses. One of such services is a home warranty. This type of coverage is similar to home insurance, but usually covers a different range of items. Home warranties pay for home systems and appliance repairs.
The majority of these plans cover plumbing, electrical system, ductwork to code, oven and microwave, furnace, washer and dryer, and AC systems. However, the plans are extremely versatile, so everyone can find one with the perfect coverage for their home.
The average cost of a home warranty plan is $400-600 a year. Considering that repairs of modern appliances and systems can cost over $1,000, this plan can save you a lot of money. However, it’s important to understand that the home warranty industry isn’t as well-regulated as insurance. Therefore, you need to compare home warranties and check every provider’s background thoroughly. Industry veterans are the most trustworthy in this business. You should also stick to bigger companies that have extensive coverage and representation in the country.
Also, always check the contract’s terms and conditions to the letter. The most common complaint about these service providers is claim denials. As such, you need to understand exactly what the warranty company can use as an excuse when it refuses to pay for repairs.
This research will take some time. However, considering that you can save several hundred dollars in an emergency situation, this is time well-spent. Considering that about 60% of the US population can’t come up with $1,000 in case of an emergency, this coverage can make a huge difference for many people.
3. Use debt strategically
A good credit score is essential if you want to live comfortably in modern society. Today, even landlords and employers will often run a credit score check before doing business with you. Therefore, keeping your credit score in the range of 700 and above is one of the most important money-savvy decisions you can make.
And in order to keep your credit rating high, or improve it if you aren’t there yet, you have to get into debt. This means that you should take out loans and repay them in time regularly. Even if you don’t have a pressing need to get a loan, using it to keep your credit score high is a good idea.
However, never forget that missing payments will ruin that same score. Therefore, you should only use loans, credit cards, and other similar services only if you are confident that you can pay them off in time.
4. Learn to live below your means
Living below your means can be a very effective way to grow your savings rather fast. In general, experts recommend living about 15% below your means. But bear in mind that you’ll need to reconsider your entire budget from this position.
The important thing to understand here is that this type of living doesn’t mean that you get to skip savings because you’ll be using that 15% for it. Instead, you create a complete budget with savings, loan and mortgage payments, and your emergency fund additions. But you create it for the amount of money that’s 15% less of what you make. That money should go into a separate savings account.
Automating your savings and payments will help you with this plan. You should also be proactive in finding ways to cut costs. Do this even if your salary allows you to splurge. However, you should treat yourself occasionally as well. For example, by using a small portion of the money you save to make your vacations more memorable.
5. Go traveling
It may sound surprising but research on “happiness economics” states that traveling is a good investment. Happy people are more productive and make more money in the long run. And traveling makes you happier as well as provides valuable experiences. Statistically, people who travel often believe this to be a good investment because of the positive impact the experience has on their lives.
Most importantly, you need to understand that investing in your own happiness is high up on the list of important money-savvy decisions. It might be surprising to some, but spending your hard-earned money on experiences actually makes you happier than simply buying goods. Also, traveling is a type of experience that’s available to people with a wide range of budgets. This means that you can use it as an opportunity to improve your money management skills.
Also, don’t forget that traveling provides you with inspiration, valuable experiences, and new relationships. All of them can benefit you on multiple levels and even provide new business opportunities.
6. Invest in a house
More people might be renting than buying homes today. However, this doesn’t change the fact that buying a house is an excellent investment that will benefit you in the long run. First of all, a house is an asset that might save you during a difficult time. It doesn’t matter whether you choose to sell or rent it out. As the sole owner of the property, you are sure to benefit from it.
Of course, there is a problem of housing availability as well as buying capacity. Many people today aren’t buying homes because they literally cannot afford them. Unfortunately, mortgage and loan programs are of little good. That’s because many people aren’t eligible for this kind of financing. But such problems can often be overcome by offering a larger down payment.
All things considered, it’s best to start preparing for this kind of investment while you are still young. You can use the aforementioned technique of living below your means to save up for a down payment fast.
Once the house is yours, you can start making it work for you right away by renting at least a part of it. In any case, it should increase in the appreciation in time.
Conclusion: Make Money-Savvy Decisions Today to Build a Better Tomorrow
Being careful with your money is important. But if you really want to have a financially-secure future, saving isn’t the only thing you should do. You need to look deeper into every expense and think about how it will impact your life in the long run. This means that you should be making money-savvy decisions that might not seem like they save you money at this moment. However, with time, they will provide you with some big monetary benefits.
Becoming a micro-investor is the first step on this road. And it’s something everyone should do because it’s nearly risk-free with the right app.
Other important decisions to make mow include investing in your own happiness and home. The latter is a big step because it’s guaranteed to be very expensive. However, it also provides you with an unmatched measure of security. Also, services like home warranties can help you avoid some big and unpredictable house-related expenses.
In regards to your happiness, remember that your mental health is extremely important. Making sure that you are happy and healthy isn’t a selfish desire. It’s a very money-savvy move that will help you avoid huge hospital bills down the line. This can also save your job because being unhappy and depressed often results in carelessness and other issues that get many people fired.
Want to Make Extra Money Now?
|
