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There are always ways you can earn more money, but there are just as many ways that you can find and save money that you have already earned or is allocated to bills. Whether you’re a money maker or a money saver, here are some awesome personal finance tips that will help you get on the path to personal wealth and freedom.
1. Budget, and Yes Budget Some More
Budgeting is the one thing that can single-handedly make or break your personal finances.
You can either….
a) not have a budget at all
b) have a budget but ignore it completely
c) have a budget and follow it.
It’s that simple.
Budgeting can be stressful at first, but I have always found that once you get into it, it’s both satisfying and eye-opening. The part that most people find most stressful isn’t actually the budget at all but the uncertainty. There’s the fear of what the real financial picture is and what it means for the future. Satisfying and eye-opening kick in when you’ve taken the time to look at the numbers and get clear on your reality. Most people find that they are overspending in some areas, but are sitting on extra money in others. It’s seldom all bad or all good, and it’s meant to be something that you put together to create the future you want. You’re not obligated to do this, no one is going to pay you except yourself and there is no report card at the end – it’s 100% your choice.
Budgets are really nothing more than a financial snapshot with a plan attached. If you don’t know how much is being spent every month and how much you would like to spend or save, how are you supposed to map out your financial future?
There are a lot of great apps and downloadable spreadsheets for creating a budget. Start with something super simple and unintimidating – don’t overcomplicate things. Once you get the hang of it you can expand and add things as you go along.
2. Learn How To Micro Invest
Investing and the stock market can seem super daunting, but the sooner you start, the more familiar you’re going to be with the lingo, the activities and the interface. While I’m all for informed investments, if you are interested in investing but don’t have a lot of money set aside for and don’t have the financial education to dive in with large sums of money, a great way to start is with micro-investing. Rather than investing hundreds or thousands of dollars in the stock market, why not try $5, $25 or $50 here and there? You can start micro investing with just $5 on an app like Stash. Test the waters with stocks like Amazon, Alphabet (Google), Starbucks or Apple. If you do business with these companies anyway, why not invest in them? And it’s fun to watch your money grow.
3. Create an Emergency Fund
Nobody expects emergencies… hence the term “emergency”. But they do happen…. to all of us. While we always hope to minimize the things in life that cause unforeseen expenses, we can’t completely stop them, so it’s still a good idea to have some preparation in place for the unexpected. (#covid-19)
People lose their jobs, cars break down, family members get sick and computers or cell phones occasionally die, blow up or otherwise go missing. If and when something like this happens, do you have the financial resources to make it through it? Think you don’t have money to spare? Try putting aside even $25/ week. You probably won’t even miss it, and if you do, it’s time to revisit that whole budget thing and either earn more or spend less. Do what you can just to get going and started; the habit alone is worth it. Slowly add more money and build your way up as you get a little traction.
NOTE: An emergency fund is just that…. You dip into this ONLY as an absolute last resort. And not sure what qualifies as an emergency? Trust me, it’s like and that annoying neighbor and makes their presence loudly known whenever they shows up!
4. Diversify Your Income
Who do you know today that isn’t interested in starting a side hustle? Side hustles are a great way to give yourself an additional source of income outside of your full time job. I always suggest choosing something that is in a different industry from the one in which you currently work. This way, if one industry completely tanks, and I’ve seen it happen, you don’t have all of your proverbial or financial eggs in one basket.
Some other reasons why a side hustle is a great idea:
You have an additional source of income (Yay!)
You can pay off debt and / or build savings faster
You can do it on your own schedule
You get to be your own boss
If you want to work from home there are a lot of options, including becoming a virtual assistant, teaching English online, to name a few. Sure, these won’t make you rich in and of themselve, but a healthy combination of extra work can certainly bring in some extra money.
If you can make that income passive, even better! For a more comprehensive list of side hustle ideas, check out this post: 10 Money Making side Hustles You Can Do From Home
Most wealthy individuals collect from multiple income streams. The most successful people have worked more than one job at some point in their lives, and more often than not, that second or third job was one that he/she created for themselves. Diversify your income, your bank account will thank you.
5. Don’t Spend What You Don’t Have
Credit cards, although extremely tempting, and yes, useful and necessary in today’s society, are the downfall of so many people. It’s way too easy to get them, and even easier to fall into debt.
It just takes one time of using your credit card when you don’t have the money and telling yourself you’ll pay it off “when the money comes in”. And then something happens; an emergency comes up, you or your spouse loses a job, and suddenly, in spite of good intentions you can’t pay it off. yes, I get it, there are genuine challenges and sometimes credit can be a savior. But be careful when throwing the word “need” around; do you really need that thing right now? Or would it just be nice and maybe convenient? I always define need as “very bad things will happen if you don’t take care of this.” It goes way beyond minor inconvenience.
Don’t buy things that you can’t afford. And if you don’t have the money, that’s the big clue that you can’t afford it.
Go over the tips above one by one and take them to heart. Take control of your personal finances. None of them will transform your financial situation overnight, but very few things in life will short of a lottery win. Life is a marathon, not a sprint, but you’ve gotta start now if you’re going to stay competitive and win at it.