Have you ever wondered how your best financial decisions should look like?
For most people, preparing for the future is as simple as making sure you have a huge amount of money. This is why many people strive to get a high-paying career, start a business, or look for any investment that they believe can earn them money for their future.
Here are some essential tips that can help you make sounder monetary decisions for your future.
Set a Budget Plan and Stick To It
The tip to set a budget is probably one that you have heard of the most. However, there is no enough way to stress how important this is
Setting a budget and following through with it would give you more power over your money, and you would have the opportunity to understand better where your money goes and how you are spending it.
For example, you can use a spreadsheet to make a list of expenses and then include your income. From there, you can make adjustments based on your needs and preferences.
Another way to monitor your expenses is to create an invoice for everything you spend your money on and keep it as your record.
Avoid “Buy Now, Pay Later” Traps
Buying anything you want has never been easier, thanks to all the convenience that technology has provided, even in how we do our shopping.
Aside from installment purchases through your credit card, most online shopping platforms now also offer their in-house financing option, giving you yet another means of availing a “buy now, pay later” offer.
Although most of these offers are accessible to land, and you can be approved in a fast as an hour (or even less!), the huge catch is that it often comes with extremely high interest rates.
You can obtain a product worth $1000 in cash or straight payment through financing in installments, but when you compute the total value according to your monthly payment, you can find that interest can sometimes go as high as 50% of the item value.
It would help to follow one simple rule when it comes to buying things no matter the price or the intended purpose: “if you can’t afford it in cash, then you shouldn’t have it.”
Strive to be Debt-free
Being debt-free is easier said than done, but it is not to say that it is not doable.
You can start your journey to becoming debt-free by paying off current debts and working on not getting any new ones.
Debts can include seemingly small things like a new car through financing, a new iPhone via an installment plan, and the like–these things may look harmless at first glance, but the additional debt it can put on your shoulders can be huge if left unattended.
Save and Invest
Saving money is a good thing, but putting all of your money in savings makes you susceptible to losing, even more, thanks to the tricky thing called inflation.
So, while it is important to save, do not put all of your money in a savings account—invest a huge part of it, too.
If you are having trouble setting aside money as savings or an investment fund, you can create a pay stub for yourself, simulating your paycheck, and add in the deductions for savings and investment. Then you can determine how much you can put away for savings without impacting your spending budget.
Savings and investment should come hand-in-hand. It allows you to have money ready at hand when you need it, and at the same time, you also have a cash flow that you can hold on to in the form of your investments.
DYOR Before Making Any Investment
“DYOR” means “do your own research,” and the slang is most commonly used in the world of cryptocurrency.
With how volatile and technical trading in cryptocurrency is, most people urge newcomers to do their own research. This is because some promise outrageous claims in crypto when, in fact, the reality is far from what they claim.
The same can be applied to making financial decisions, especially when thinking of investing your money in a venture.
Regardless of whether it’s a traditional business, trading in Forex or stocks, or trading in cryptocurrency, or any kind of venture where you expect to make monetary benefits, do extensive research first before anything else.
There is no one exact blueprint in being financially successful and making the best financial decisions for your future. Each of us has our own roadmap, our own timeline, and a system that will work for us. One thing may work for that person, but there is no guarantee that it will work for you, too.
While these tips are meant to help you start straight and start with a good foundation for arranging your finances, you have to discover what system works for you and when you find it, make sure to stick to it.