Estimated reading time: 5 mins
We all need to do more with our money. Whether you are just starting on your career or have already secured yourself a cushy job, you should never stop thinking about it and how you can better spend it and even invest it. You need to do all you canso that you can stay financially secure now and well into the future.
Bad times will happen.
You might lose your job, go through a divorce, or get injured overseas and end up being several thousand in debt. You cannot predict the future, but by having the financial stability and by following a few smart money habits, you can protect yourself regardless of the challenges you face.
Start by Budgeting
Poor spending habits can make result in living from pay check to paycheck even when you do not need to. Your monthly budget will be made by:
- Making a Note of All of Your Necessary Expenses (e.,rent, Internet)
- Keeping Track of Your Variable Essentials (e.,utilities, food)
- Creating a Smart Monthly Budget and Plan Accordingly
Budgeting starts by understanding where your money currently goes. That is why you need to go through and make a note ofall your fixed expenses, or in other words, costs that stay the same month after month. Wipe those costs from how much you bring in, because that is your true budget that you will need to work with.
Tips for Buying
As soon as you have a disposable income, you have a right to buy frivolous items that you simply like.Whether this is clothing, or décor, or art, or even just luxury food items.You can have it all, so long as you follow these tips:
Choose Long-Term Items Over Disposable or Cheap Alternatives
When it comes to managing costs, try to consider something in terms of cost-per-use. Buying frozen fruit and vegetables, for example, is a very budget-friendly way to cut down on your food costs. As a bonus, they also tend to bepacked full of nutrients, having been flash frozen on site and not subjected to long transportation periods.
Save for Investment Pieces Over Cheap Items
There is a new saying floating about that summarizes to buy less, buy better. This saying can be usedfor anything you can buy, but it predominately refers to clothing. The point here is similar to choosing long-term over disposable. Choose items that are well made over cheap ones, even if you have to save up for it.
How to Cut Back on Impulse Buys
Create a system for yourself. If you want to buy something frivolous (meaning not essential to your survival), then wait three days before actually bringing it home. Now, if there is a big sale, or you are shopping second hand, you won’t have the same luxury of time. In these cases, you need to instead be highly critical of why you want said item. Is it because there is a good deal, or is it because you truly love it? If you only want it because of the discount, move on.
Tips for Investing
Once you have cut down on your expenses and improved your buying habits it is time to start to do something with that money you have left over:
1. Have an Emergency Savings Fund
Everyone needs to have money in their account that stays there month after month. It is all too easy, especially in areas like London, to go broke and struggle between pay slip. By cutting back on frivolous costs, however, you can better save. Even if it takes months, building up this emergency fund will help you stay financially secure and stress-free.
2. Start Saving for Your Retirement – Now
There are many pension plans in the UK, but that doesn’t mean you should aim to save on your own accord. Instead, follow these tips on how to save enough so that when you do retire you are in complete comfort and truly can go out and complete your bucket list.
3. Get on the Property Ladder ASAP
Though renting can be the better option if you don’t plan to settle for ten years, it is still a smart option. Buy a home now, and if you need to move rent that property out. Depending on where you live you might be able to cover mortgage costs, property taxes, and even provide you with a healthy income. Once your mortgage is up this first property can help you stay financially secure until the end of your days or a fully-paid home to move back to once you are ready to settle down.
4. Try Your Hand at the Stock Market
The stock market can be so incredibly lucrative if you know what you are doing. You need to know how to trade and how to analysethe market. You also need to keep up to datewith public news and understand how public policy will affect the companies you are investedin. All of this takes a lot of time and effort, which is why stockbrokers are notorious for working themselves to the bone. As someone without this experience,you might consider the stock market to be beyond your ability, but that isn’t the case. There are many scams out there, and itis up to you to determine fact from fiction.
In some cases, sound advice is marked incorrectly as a scam. The Tom Gentile scam, for example, does not have any basis in reality. It is simply rolling advice on which stocks to invest in based on a 10-year track record, but that isn’t always the case. You need to be careful about what resources you subscribe to and decide for yourself whether a deal seems too good to be true, or is just a great opportunity.
Doing all of this will help you do so much more with your money. Chances are you do not need to struggle to make ends meet, especially if you are single. Instead, evaluate your spending habits today, better them, save, and then start investing for your future.