The last two years have been a roller coaster ride for us with the strange day-to-day living setup brought by the pandemic. Many have run out of money with businesses paralyzed, skyrocketing unemployment, the stock market crashing, and high-cost medical expenses. Yet, despite the dreary situation most individuals suffer from, a handful made the most out of the market depression.
Your financial dreams are not far beyond your reach this 2022. Here are the 7 money moves you can make for a prosperous future:
Define and find your savings goal
Saving is undoubtedly one of the most repeated bits of financial advice out there. However, despite the widespread education of the importance of saving many, many weren’t following through the tip.
When it comes to savings, you shouldn’t just think of putting some bucks into your bank account for the sake of having the so-called reserved money. Instead, have a clear intent to which the savings is for.
Define how much of the savings is allotted for a particular category and map out a detailed arrangement of the amount you’d like to go into every project. Do this as if you’re making your daily budget, splitting every penny into different accounts, rather than merely having money with no explicit use.
Without allocating your savings into a specific expenditure, you use up your extra money senseless shopping, which you might come to regret later on.
The essence of saving money is pretty simple: It allows you to take pleasure in greater security in your life. Your savings will cushion you in case unforeseen events happen. And if you have savings allowed for discretionary expenses, you will have a bigger opportunity to try out new things and take risks, like opening a business.
Make a plan to pay off debt
Refrain from leaving debts unpaid. So many people nowadays think that a little debt won’t hurt their future, but to tell you frankly— it would. After all, big holes start from the small ones.
Every time you take out a loan or borrow from lenders, you are borrowing from the money you hope to earn in the future time. If you want to use up your future earnings paying up for something you already consumed a long time ago, then sink yourself with debts. However, you know what to do next if you want financial freedom.
Aside from the worry-free financial life, having no debts also frees people from the bondage of medical complications. When you are in debt, it’s quite difficult not to worry about how you are going to make ends meet or how you’ll keep making payments.
The stress that debts bring can lead to mild to severe health complications, including migraines, ulcers, and worst, heart attacks. The more you sink yourself into debts, the more likely you will face health complications.
Spare some of your time to list down all of the debts you’ve acquired over the past years, their interest rates, and once you’re done, pay them off one by one.
Build a good credit score
Many financial experts say you need to run away from credits. But the truth is, credits can also do you good in the long run. If you need a fund for your child’s college or a loan for a mortgage for a house— you’re one call away from banks if you have good credits in the record.
Credits determine your attitude towards debts. If you have good credit, it could take you just a few minutes to make a loan you want, but if your records show a bad credit score, it could be pretty hard for you to lend money for any purpose.
Aside from being a reference used in the market for a loan, credits are sometimes regarded by employers, insurers, and landlords as a basis of an individual’s responsibility and reliability. Having bad credit can mean that you’re a risky bet, and although your credit only displays how you deal with debts, some associate it with other life situations.
Various benefits come with having good credit, including access to lower interest rates, higher credit limit, and faster loan acceptance. Hence, you should understand credit habits that might be hurting or helping your credit score. Knowing how to get a good credit score will give you some positive financial opportunities, especially if you are a business owner.
Unfortunately, the only way to improve credit score is by making credits (debts). But if you use your credits diligently, you will be able to sail into a brighter and prosperous future.
Grow your emergency fund
Countless articles and videos flood the internet telling you to have an emergency fund. If you already have one, then it’s time to grow your emergency cash reserves now.
Make it your goal to save every month until you reach the amount you can sustain yourself in the course of six to nine months. This goes for those who are working in the corporate world, breaking their backs in 9-5 jobs. If you are working an irregular job, you should save a little bigger to sustain yourself for about 12 months or 1 year.
In growing your emergency fund, you need to have a dollar number of targeting each month. This helps in making saving a habit, and with habits, it will be way easier for you to achieve your objectives. To earn extra bucks for an emergency fund, you can sell unwanted or unused possessions online, or you can look for a side hustle that pays well.
Make a spending plan
Essentially, this is all about budgeting. You need to formulate a simple plan that will help you meet your expenses, at the same time, spend your money the way you want to disburse it.
Budgeting is one of the sturdiest foundations of success and wealth. With good budgeting, you can avoid having “spending leaks” that might hinder your prosperous future.
Here are the points you need to keep in check in your budget plan:
- The income you make every month
- Amount of money you owe and the monthly amount you allot to pay for it
- Your fixed monthly expenses (food, utility bills, and the likes that you pay usually pay every month)
- The expenses you spend outside your “needs”
Keeping track of these points will alleviate your self-made delusion that your finances are doing great if they are actually terrible in the real sense.
Ingrain the habit of continuous education
Most wealthy people have something in common: their ferocious appetite to learn more. This doesn’t mean you have to go to a university over and over again to learn by textbooks and get certificates that could land you a job. Instead, you should educate yourself on things that will help you grow as an individual or as an entrepreneur.
Learning doesn’t stop the moment you receive your diploma after school. You just enter into a new level of learning. This time, educate yourself on tactics to make investing worth your while or read any book that sparks your interest because you never know— it might serve as a bridge to your financial breakthrough.
Find a mentor
Mentorship comes with perks for both mentees and mentors. Such relationships can assist in learning new things, building networks, and growing individually as professionals.
A mentor would encourage and enable your personal and professional development by setting their efforts in guiding and giving you feedback in every step you take in your journey. They can provide insights and information that may be vital to your success.
