With everything this year has thrown our way, one thing that’s becoming clear is that having your finances in order is crucial. You never know what might happen next and being prepared is one of the best things you can do.
Being able to effectively manage your finances should be a lifelong goal, since it can literally affect your entire life. Here are our top 5 tips:
If at all possible, try to ensure that you have a rainy-day fund set aside. This might seem like a daunting task, especially if you aren’t making the big bucks. However, even a small start can add up more quickly than you know it.
You’ll appreciate having a little extra money on hand if worse comes to worse, and you’ll be able to avoid having to ask a friend or family member for money instead.
One of the biggest barriers in achieving happiness in life is to be saddled with debt. Because of this, you should try to avoid accumulating debt from the very start, and if you already have debt, your number one goal should be to start paying it down as soon as possible.
The less money you owe, the more you’re able to save.
Something most people don’t do, but should, is to keep a financial calendar. This can help keep your daily finances more visible, so you’re less likely to skip any payments and you’ll have a better handle on your day-to-day spending.
You should note any monthly expenses, and any major purchases. But don’t forget that even the smallest purchases can add up over time.
One of the easiest ways to save up money is to literally make it as easy as possible. Set up automatic saving so a certain amount each month is deducted from your checking account into your savings account. That way you’ll be more likely to spend only what you already have on hand, and to not dip into savings.
It can help you build up the habit of only spending on things you need instead of things you only want.
One way to truly achieve financial independence is to have multiple streams of income. In other words, if you have a special talent, ability, or even spare time, put those things to use and find a side hustle.
It never hurts to have a back-up plan in case your day-job goes sour or becomes obsolete.