Have you been working for the longest time and still you are not financially secure? Most people have debts and loans to pay off as soon as they graduate from college. However, it is also crucial that you secure your future by being financially literate so you can avoid significant money problems in the future.
Being in debt because of student loans is not a crime. Thousands, in fact, millions of people all over the world avail of student loans. However, the key is to plan your financial status accordingly, going into the future. Planning your finances is a key strategic requirement, in order to be successful in life.
Here are some practical tips on how to avoid being financially broke.
1. Start Saving:
As soon as you receive your salary, it is essential to save at least ten percent of your net income by putting it straight into your savings account. It is a good idea to start building an emergency fund equal to six months of living expenses, so you have something to lean on in case something unfortunate happens to you. To get started, talk with your payroll department and ask them if it’s possible to open up a separate account that is exclusive for your savings.
Remember that living from paycheck to paycheck can lead to a stressful life; that’s why you need to be in control of your financial decisions while you are still capable of earning money. It is also a wise decision to get a life insurance policy while you are still young. In case you need money during your retirement years, you can perhaps consider selling life insurance policy schemes or cash out your policy to help you with your financial needs.
2. Avoid Lending Too Much Money:
It is not a bad thing to help other people who are in need, especially family members and relatives. Unfortunately, most of these loans regardless of the amount end up not being paid back on time or at all. Before lending money to others, it is best to assess your current situation and see if you can afford it. Do not put yourself in a situation wherein your finances will be compromised.
It is a good idea to say no to people. This does not make you a bad person. Rather it projects you as a smart and secure human being. You should try and avoid lending to people who you know are not going to pay back anytime soon. Saying no at least till a point where their non-return won’t have an effect on you is a good and smart decision.
3. Avoid Impulse Buying:
One of the most common financial mistakes that most people make is being impulsive when it comes to shopping – meaning buying things that are not needed. You might sometimes get carried away with your emotions or peer pressure; that’s why you end up spending more than what you can afford. One tip to avoid impulse buying is not to bring much cash with you whenever you visit malls and go out with friends.
Always remember that being secure is better than exhausting all your resources. You might think that your friends are having all the fun spending their money. However, in the long run, they are the ones who will keep crying, while you will laugh all the way because of your savings.
4. Try Your Best to Live a Simple Life:
Living a simple life is easier said than done, especially if you are already earning your money. There is always a reason to spend money, but there are many reasons as to why you should save more. Being a wise spender means prioritizing your needs versus your wants. You can also save money by simplifying your lifestyle. You can start cooking more instead of dining out or rent movies through pay per view instead of going to the theatre.
Securing your finances while you are still young and able to work is very important. Some people who go through financial setbacks find it hard to bounce back especially if they are close to retirement age.
