How many times do you track your purchases? Every day? Once a week? Tracking your money spending habits will help you set clear financial goals.
If you haven't realized this yet, you need to set financial goals. If you don't bother to, you will – subconsciously at least- bank on luck, and you’ll always fail.
That is especially true because you don't have an action plan in place to save money and budget. So have a workable plan. Set financial goals. If you've never thought much about this, you’ll always fall victim to impulse purchases on a more consistent basis. This will further derail your savings goals. But don't panic! Here are ten smart financial moves you can employ in your life (for a successful financial journey).
1. Build an emergency fund
Want free money?
If there is something you need to plan to achieve is having a strong emergency fund. Many people deem emergency funds short term financial goals. While this is true, it equally has long term benefits hence the need to have one.
What are some of the benefits, you ask?
- It acts as a reserve for money whenever you're in a tight spot.
- In case of an emergency, it cushions the hard punches life throws at you. Think of a huge medical bill or a job loss.
- It acts as a money management tool that kick-starts a saving habit.
- When you don't want to interfere with your long-term investments, emergency funds can keep you afloat between your investment accounts and your paycheck. It is more like a halfway point.
- The funds protect you when the stock market falls. Stocks are unpredictable. When they dip you take a blow, but with an emergency fund the dip is tolerable, less emotional.
With a well-stocked emergency fund, you are guaranteed life won't serve you a huge blow when things go south. These funds offer reassurances in many life situations.
For instance, you can start a business or build your home even when your coffers are almost dry. Having adequate emergency fund is impressive, but there's something else you need to do:
2. Pay off all your debt
If you want to make smart financial moves, it is important you get out of debt. You can do it. Yes, you can get out of debt completely regardless of how much you are paid. It is, in fact, a requirement if you are to achieve your financial goals.
But isn’t there good debt and bad debt? True, but let's face it. At some point in your life, all debt needs to be paid off including your student loan, mortgage, credit card debt, etc. So, let's not debate about this rather search for a convenient option, find out more about such lending methods to pay all these debts on time and get approval with less efforts.
While getting into debt, in the first place, may have been a wise move, it inflicts a dent on your income as time progresses. Why should you get out of debt anyway?
- To gain 100% control of your income. Nothing beats this feeling.
- You will invest more, save more, and even spend more. Why? Because you'll be left with more money to do what you please.
- It removes the dent on your finances. Nothing gets cut from your paycheck to pay off a debt.
- You become stress-free and relish some peace of mind.
- If you don't like a job, you call it quits. When you don't have a debt, it is easier to pull this move
Debt is a trap everyone falls into. But if you can set up a financial goal to become debt free, you can pay off what you owe. It takes discipline, though. Once out of debt, what next?
3. Plan your retirement as early as now
Planning for early retirement is a top-rated financial goal. You probably love what you do right now, but you won't be doing it for long. You’ll hang your boots at some point, and that time is coming. According to a recent survey, only 43% of young people have prepared for retirement.
A significant number still hang in the balance unsure of whether they'll have saved enough for retirement to live on. Plan early for retirement. How? Build up a large portfolio early to make saving easier, and you won't have to work so hard for your retirement. Next …
4. Have an additional stream of income
No matter how much you love your job, having an extra stream of income is necessary. It provides insurance for your income. Creating multiple income streams is not a complicated process. You can work part-time for extra cash, to start with.
Or, you could start a side business that boosts your income while working. Having an additional stream of income prepares you for early retirement. It helps pay off debts, too. It opens you to a world of many other possibilities.
5. Get enough insurance coverage
Most people don't have insurance coverage. The good number that has are probably paying too much for it. You need to strike a balance between having enough and not too much to make smart financial moves. Taking up too much insurance coverage or having less of it, can derail your financial goals. It’s crucial to work with an insurance agent to advise what’s best for you.
6. Survive on less
Living within your means – or below what you earn – is perhaps a great financial move you can make. When you survive on less you have plenty of income to save, invest, and settle debts. But this is only workable if you make enough to live on.
7. Avoid spending on unnecessary things
There are things you don't need yet you spend your money on them. Impulse purchases stand between your financial goals and success. The addiction to spending more is an obstacle that stands in your way of making smart financial moves. What to do? Detach yourself from the desire to own more things. This guarantees freedom, peace of mind and happiness.
8. Spend more time on what you love doing
How is spending time on work I love a smart financial move, you ask? Because it is no longer about earning money but feeling good about the job. Let's face it. Few will actually retire to a serene beach life after retirement. Since you'll be working throughout your life, you might as well feel good about your life. But this is possible if you are out of debt.
9. Give to the less fortunate
Sharing what you have with people who can't afford good fortunes comes with a lot of benefits. First of all, it affirms the control that money has on you. If you're afraid you'll go broke by sharing with the less fortunate, money has taken control over your life.
But is giving a smart financial move to make? A handful of wealthy individuals give more. While money doesn't always come back to them as are resolved, there's however a deep personal satisfaction that comes with helping others.
10. Don't leave your financial house in a mess
Death is inevitable. But regardless of how you live your life, make it a goal to leave your loved ones a good life. That means making clear financial goals that provide you enough financial resources. And when death comes knocking, your financial house will be in order.
Achieving financial freedom in life is not a matter of luck. It is purely dependent on your financial goals and how well you set them up. So work towards building an emergency fund that cushions you against life’s punches. Stay out of debt and plan your retirement early enough.
To achieve great financial moves this year, create multiple income streams, strike a balance between insurance coverages, and live within your means (or less of what you earn).
Remember, don't spend money on unnecessary things. Enjoy work you love and share your good fortune with the needy. If you start making some of these financial goals and have a workable plan in place, you’ll succeed – if not leave your financial house in order.