If you dread managing your finances and are looking for simple, fool proof finance tips that will help you take control of your financial future, you’ve come to the right place. Simply continue reading to discover a simple guide to managing your finances.
Invaluable Finance Tips:
Make sure to keep track of your net worth:
To find your net worth simply subtract your liabilities such as any debts which you may have accumulated from the assets which you have accumulated, such as your savings and investments. The number which you’re left with is your net worth. One of your primary financial goals should be to try and increase your net worth over time by paying off your debt and increasing your assets. Remember that the sooner that you pay off your debt such as your home mortgage and your credit card debts, the less interest that you’ll end up paying over the long term and the higher your net worth will be in 10 years time.
Limit your use of credit cards:
Instead of relying on your credit cards to pay for everyday purchases, it’s a great idea to limit your use of your credit cards and to use cash or a debit card to pay for your everyday expenses. As if you don’t pay off your credit card balance by the end of each month, you’ll have to pay a high interest rate on the balance on your credit card. So it’s well worth saving for items which you can’t afford instead of whipping out your credit card to pay for expensive, big ticket items. Examples of which may include electronics such as smart phones, tablets and laptops.
Create a financial calendar:
One way to avoid being surprised by financial payments is to create a financial calendar, so that you’re well aware of major financial obligations before you have to pay for them.
Make sure that you invest a portion of your income every month:
In order to ensure that your money works hard for you, it’s a wise idea to invest money in stocks, private equity, ETFs and property as well as putting money into your savings account. As typically your money will grow faster in investments than it will in a bank account. But before you invest it would be wise to consult a professional. If you are investing in the stock market an investment banker could be a perfect consultant as they are basically behind every major transaction. As explained in this Wall Street Prep article investment banking has many other functions that can help a business that’s trying to expand. While it’s a wise idea to allocate a portion of your monthly income to your long term savings account, it’s also a wise idea to allocate a proportion of your monthly income to building a diversified investment portfolio. Especially if you’d like to start preparing to retire early.
Write down your financial goals for the future:
Just as it’s important to think about your career goals, health goals and relationship goals, it’s also important to be clear about your financial goals for the future. It’s well worth sitting down for 30 minutes in order to jot down some of your key financial goals for the future. As an example, you may want to retire before you turn 50 or you may want to save towards a house deposit. If possible, make sure to write down a lost of short term financial goals and a list of long term financial goals, to strive towards.
So there you have it, a simple yet effective get to managing your finances and preparing for your long term financial future. So if you’d like to retire early, it’s well worth following the tips listed above.