Tips to help make your money work for you!
No one wants to be a slave to their money, and yet most of us end up in a financial mess at some point (or even throughout) in our lives. The good news is, it’s never too late to change. And because change doesn’t happen overnight, it will require time and patience to dig yourself out of any mess. These tips apply even if you’re not yet in a financial catastrophe. Make your money work for you with these tips.
Set A Financial Goal
Failing to plan is planning to fail –cliché but true. Set long-term and short-term goals with a realistic mindset. Doesn’t it matter how big the goal is – you want to be a billionaire? Own a home? Retire at 40? Great! Motivational speaker Lisa Nichols says if your goal doesn’t scare you, then it’s not big enough. After setting up the big financial goal, break it down into small steps and set a deadline for each. Make it realistic. This will make it look less daunting. Write down the action steps. How will you achieve each small step? Take up another job? Cut down on your expenses? Turn your hobby into a money-making enterprise? Be sure to celebrate each step you’ve ticked off.
Set Up a Budget
A budget is the best way to track your spending. Write down what you need to spend on for the month, then prioritise. Experts recommend that at least 10 percent of your income should go into a savings account. It is also recommended that your monthly rent shouldn’t be more than 15 percent of your monthly income. Adjust your lifestyle to fit your budget; the point of setting up a budget is to ensure you don’t overspend.
Manage Your Debts
Your most expensive debt, that is, the one with the highest interest, should be your priority. Plan on making payments on time. Pay more than the minimum balance – this will require a lifestyle readjustment, for example, cutting back on your monthly spending.
What do you first do when you get paid? Hit the stores and shop till you drop? Set aside money for household spending and then save the little that’s left (if there is any left at all)? That’s the number one financial mistake most people make. Pay yourself first and think of ways you can save more. If you eat out often, cut this down to about once a month. Carry packed lunch to work. Set up an automatic deposit because let’s be honest, we know that sometimes it is easy to lie to ourselves that we’ll do it and end up spending the money on something else.