5 Helpful Financial Tips
You’re not a kid anymore, you know how to act responsible, and your life is getting a little more complicated. You could be on the verge of getting married and having kids or moving up in your career, buying a home. These are all things that are in the transition process and can be overwhelming at times. Here are five helpful tips to help your wealth grow.
Live Below Your Means
So, what does this mean? It means if you are bringing in $5,000 a month and spending $4,999 of it, you’re not being wealthy, you’re just doing ok. This isn’t a bad thing, but the bigger of a gap you can make between what you earn and what you spend means the faster you can reach your financial goals.
Focus on the percent of income you put away, not the amount
Going back to the example above with your $5,000 a month income, let’s say you put $1000 of that away into a savings account. This a good chunk of money to put away. Let’s say someone then gets a promotion and you are still putting away that $1,000 but spending the extra amount. This is called lifestyle inflation and will kill your financial situation. In the end it isn’t about the amount of money you put away, it is about the percentage of money.
Be proactive not reactive
You might have already hit that point where you have had to give yourself a financial reality check. Did you learn from that experience? One thing is that you shouldn’t take the money you have in your bank for granted. You should spend time looking over your finances each month and see where this spending is leading you.
Spend money on what you value
Most people think that the more money they have coming in the more they can spend it on. Spending money on things that provide you with fulfillment and happiness are more important than spending it just for the sake of spending it. If you’re spending money like everyone else just for the sake of it, you’re missing the point. Spend it on what you value.
Don’t complicate things
When it comes down to it, the best thing to do is to just keep it simple. All it takes is a little discipline and some small and simple actions. You won’t see immediate results but keeping going and over time you’ll reach your financial goals. One of the biggest keys is consistency.