Do you often find yourself spending more than you earn? Or, do you have unpaid credit card bills that you can’t seem to shake off month after month? Or maybe, it’s the monthly bills that keep adding up? If your mortgage, car payments, electricity bills, etc., seem to be holding you down financially, know that you are not alone! The article is designed to help you understand the steps you’ll need to take to improve your financial status.
Most people don’t understand money and personal finance because growing financially and improving personal finance is like working out. The more time you spend in the ‘gym,’ the more prominent your ‘muscles.’ Therefore, aim to work on your personal finance a step at a time.
More often than not, adulting can be pretty strenuous, and one major adulting challenge shared across all races regardless of social status is money management. Irrespective of how much money people have, it’s never enough.
More often, you’ll wake up to the news of business moguls, athletes, and even political leaders filing for bankruptcy. Why do you think that happens? We want to help you understand more about money and the steps you need to make money work for you instead of working for money.
We’ll look at:
- Understanding your money
- How to spend your money
- How to budget for your expenses
- How to invest your money
- How to plan for your financial future
- How to learn from past financial mistakes
- How to get ready to upgrade financially
- How to use the tools you have at your disposal to gain financial freedom
Personal finance 101: How to make and keep your money
Understanding your money
Money is a shared commodity. It is a statistical representation of wealth whose quantity increases with the individual, company, or group’s value. Moreover, it would be good to understand that the system is designed so that for an individual to get another must give.
Understanding the system and opening your consciousness to how the wealth system operates provides valuable insights to help you make and ‘keep’ your money. However, the word keep doesn’t imply that you store money in your bank accounts or at home in a safe.
The word ‘keep’ implies investing your money in assets that can help you save your money and give some back as profit. The two fundamentals of Money and Personal Finance are letting money go by investing it in rewarding ventures and learning how to convince others to give you their money.
How to spend your money
If there’s one thing that cripples 98 % of people globally, it’s the 9-5 job. People have become slaves to lifestyles, class, and having the latest gadgets to the point that they spend more than they earn.
Individuals work a 9-5 to afford to pay for mortgage, school, bills, and credit cards without realizing they have become slaves to the system. Time not spent in the workspace is spent shopping, clubbing, eating, and using money or credit that they’ll have to pay for monthly.
Learning to spend less money than you earn and avoid keeping up with the Jones’s could help you save lots of cash monthly. You could then use this cash to invest in projects that are sure to give you more profits. Work your muscles and create the restraint needed to help you avoid spending money to the last cent.
How to budget for your expenses
If you keep asking yourself where your money is going monthly, then the chances are that you don’t have a budget. Having a budget helps you plan your cash flow. It enables you to pay for your necessities, save a percentage of cash on the side, and treat yourself with what remains.
If there’s one thing that having a budget is sure to make you aware of, it’s those small things that add up. Having a budget will help you realize how much money you’ve spent on phone calls, Starbucks, and various other indulgences that you could do without.
Paying for stuff as soon as your money drops into your account is sure to leave you penniless after a short period, and you’ll find yourself repeating the cycle monthly—a great rule of thumb when spending money is the 50:30:20 rule. Spend 50 on the necessities, 30 to have fun, and save 20% of your income.
How to invest your money
Now that you’ve saved some cash, it could be time to invest. You’ll have to think long and hard. Take time to analyze various business ventures and develop the best business venture that’s sure to bring about great results at low risks and invest in it.
There are four things that you’ll have to consider before starting any venture. The amount of risk you’re willing to take, projected returns, your capability to oversee the business, and the amount of time you are eager to invest in your project.
Know when you are ready and take the step. However, while looking for great business ideas, take care not to fall into Ponzi scheme traps and get rich quick schemes. Plus, it doesn’t matter how small you start; what matters is how big your idea is and your willingness to see it through.
How to plan for your financial future
Every individual envisions seeing themselves in the latest supercar, eating in lavish restaurants, and going to the beach on a Monday. In reality, less than 20 % of individuals ever get that close. The problem is that they don’t often have the best plans, and if they do, they never follow through.
If you want to succeed in personal finance and improve your net worth substantially, you have to plan your future, strategize, and follow through to the last point. And when you get there, build even more steps and keep climbing.
You’ll have to divide your plan into simple, manageable daily, weekly, monthly, and yearly goals that you’ll tick off your planner each day. Take time to celebrate each significant milestone and, above all, remember to reward yourself after an extended period of working smart. After all, why are you working in the first place?
How to learn from past financial mistakes
If you want to make more money, you’ll have to learn from your past and present. More often than not, the past, present, and future are interconnected, and following these connections could be a great way to understand what to invest in and the best decisions to make.
For instance, when the internet was invented, no one knew it would be such a huge thing. Most people thought that it would be a phase. However, as it continues to mature and grow, a few people saw the opportunity for something bigger than themselves; Bill Gates, Mark Zuckerberg, Jeff Bezos, etc.
Analyzing the past and present could help provide you with great insights that you could use to invest in the right products and opportunities. Take our time and try to find the patterns. Who knows, you could be the next Jeff Bezos.
How to get ready to upgrade financially
Planning for your journey is a great incentive to help you fix your car. You aren’t successful financially right now because you, as an individual, are faulty. You’ll have to take some time to relax, reflect, sharpen the ax, and work on yourself.
While most people would like to think of themselves as logical individuals, the truth is that we’re all emotional beings who make emotional decisions subconsciously. There is a good reason why some people may choose to make coffee at home instead of going to Starbucks and it may be because they don’t like paying extra for a simple coffee.
Getting your financial emotions in tune with what you want to could help you make boundless steps in a short period. While most people will be thinking about the business ventures they’ll need to invest in to get more money; you’ll be content with what you have, spend less, and be in the proper sense of mind to know what you need to do to make more money.
How to use the tools you have at your disposal to gain financial freedom
You may not realize it entirely, but this is the best time to be alive. You’ve got instant global communication, the fastest vehicles ever, a relatively peaceful political climate, etc. What could be stopping you from becoming your best self if not you?
You could use the internet to sell products online if you wanted. You could advertise your services to billions of people globally through social media. You have all the resources you could ever need; some of them are free, but you’ve never really thought to take the first step.
Use all the apps provides on your smartphone to plan your budget, plan your schedule, market your merchandise or services, pay your bills conveniently, and get more time to work on your projects. You could be working from your home in a virtual office and make millions. You only need to take the first step!
Understanding money is quite simple. You have to lure it in and let it work for you, but like a good CEO, you’ll have to be disciplined, tough, and ready to tell the money what to do. You’ll have to work on yourself, take time to reflect, and develop workable solutions that’ll help boost your money management skills and provide you with insights on making investments.
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