Taking charge of your personal finances
Everyone dreams of financial freedom – having enough money saved up and invested that you’re able to take care of yourself and your loved ones (and maybe do a little traveling) without having to work anymore. Sadly, despite the ubiquity of this dream, few people ever reach this goal – and many find themselves at retirement age without the resources they need to maintain their lifestyle.
Considering this is also the age where medical expenses typically start to creep higher too, far from being ‘financial free’, many people find themselves in exactly the position they wanted to avoid – becoming a financial burden to their loved ones. So how can you avoid this all-too-common mistake?
Take stock and really think about goals
As a very general rule of thumb, a person needs to save 15% of their income for 40 years to have enough to retire. If you don’t want to (or can’t) wait 40 years to retire, that percentage needs to be higher – creeping up to 36% of your income if you only have 20 years until you retire. Note that this doesn’t include money for nice extras like that world cruise you’ve always wanted to go on, but simply to maintain the lifestyle you have now. If you’re not putting enough away, it’s time to get serious about your personal finances.
The easiest way to do this is work out how much you need to put away each month and have that come off your salary automatically without the need to exert your own willpower. As long as you keep an eye on your progress and make sure you’re still on track for your goals from time to time, it becomes something you don’t even need to think about anymore.
Make a plan to get out of debt and stay there
If you’ve been carefully avoiding making solid plans for your financial future because you can’t see how you afford to save anything after your monthly debt repayments, this is the first issue to tackle. It’s not pleasant, but being proactive, speaking to your creditors, or exploring debt consolidation or other channels can make that burden a lot lighter. Once you’re no longer ducking and diving to avoid the problem, taking the next steps becomes infinitely easier!
Cut your costs and revisit your budget
If you never seem to have enough money left at the end of the month, you’re living beyond your means. Spend a month or two carefully tracking exactly where your money is going to, and it quickly becomes apparent where you can cut back. It might be making more meals at home rather than eating out as much, avoiding the shopping mall after payday, canceling that cable contract, quitting smoking or drinking, or closing those clothing accounts for good – even relocating to a more affordable neighborhood if rent is your biggest money drain.
Consider a second income
Of course, having no money to spend on entertainment or luxuries is no fun either – in which case start keeping an eye open for opportunities to increase your income. Starting a side hustle, looking for a new job or asking for more responsibility at work, or seeking part time work on the weekends are just a few options.
Get expert advice
Once you’ve got the basics in place, it’s nice to get your money to really start working for you! While reading up as much as you can on investment opportunities in your region is always wise, speaking to a wealth and asset management firm like CoinIT is the next step. Financial lingo and jargon and wading through spreadsheets of numbers and percentages can be confusing to the best of us, so having a real-life person to walk you through it and give advice is always helpful. As your assets grow, they can help you diversify your portfolio and plan for the best possible financial future.
Get interested in investing
Wherever you live, there are likely loads of podcasts, radio shows and personal finance blogs dedicated to helping people make better decisions about their money. Getting your hands on some useful personal finance books at the library or making sure to catch the financial or investment news on the radio every now and then can be empowering and ultimately financially rewarding.
Protect your savings from yourself!
Whether it’s a fixed deposit that’s rolled around, moving jobs and suddenly having access to some of your retirement savings, or simply having it be too easy to dip into your funds when there’s an ‘emergency’ – we can often be our own worst enemies when it comes to money! You can help curb this by actively choosing accounts or investments that are only available after a fixed term, and having a separate savings account to act as an emergency fund.