Five Personal Finance Hacks to Start Now
Having total control over your finances can give you a fantastic sense of freedom.
However, it takes a lot of discipline and hard work for you to achieve this. This article will share some of the most useful tips that you can start now to live a better financial life.
Build multiple sources of income
Whether it’s through your business, a side hustle, or investing, building your income network can help you secure your financial future. Starting early means you can compound over a more extended period and take on more risk as you have more time to recover from mistakes.
Grow your savings
Understand your cash inflows and outflows so you can work out how much can be set aside as your savings. It is recommended to set realistic goals and a concrete plan to reach your targets. If you’re not yet ready to make investments, at least have your current affairs sorted.
Avoid bad debt
Bad debt is something that leeches money from you over the long-term, including credit card debt or interest for late bill payments. It is also important to note that too much bad debt can impact your credit score and prevent you from borrowing in the future.
Set aside an emergency fund
Your rainy day fund, which could be around six months’ worth of your living expenses, should be one of your priorities. Even saving 10% of what you get each pay cycle can eventually get you to that target amount.
Live below your means.
Living below your means requires suppressing your desires at a certain point. This is probably the most underrated personal finance skill, but one that works. If you’re not sure what that means, here are some examples:
You don’t actually need that Mercedes, BMW, or Audi. Sure it will make you feel great until the warranty is up and you have to pay thousands of dollars every year just to keep it running. We aren’t even going to mention how much more you’re paying in premium gas as well as your auto insurance.
Do you really need to stay in a 5-star hotel? For a treat, sure but honestly, mid-range hotels like Holiday Inn Express are for business travelers and they are actually just fine. Pro-tip: many of the Westin Hotels, now part of the Marriott umbrella, feature the Heavenly Bed, even if you’re not at their most expensive resorts.
Before buying a large house to impress your friends and family, do some research about how much it will cost to heat it in the winter and cool it in the summer. If you’re on the east coast, it could easily cost you a minimum of $1,000 per month in heating oil, and that’s conservative.
You may be tempted to show off your peacock feathers to keep up with your peers. However, those who enjoy enduring financial success tend not to care about what others think or what others are doing with their lives.
Expert Financial Planning
You may find some of these personal finance hacks challenging to do, but no one said the road to financial freedom is going to be easy. Once you’ve adopted good money habits and learned how to discern what works and what doesn’t for you, you’ll see that all your efforts are worth it.
If you want to chat more about financial planning or growing your income streams, drop us a message to schedule a one-on-one consultation.
