10 Keys to Financial Success
The secret to managing your finances is to become aware of what you need, how you spend and what do you want for your future. Understanding the elements on a Budget and change some habits in your life will permit you to control your finances and plan your next endeavours. Continuous learning helps to achieve better control and makes your life easier. You don’t need to be a master. Know your spending pattern is a daily exercise. Here are some key steps:
1 - Learn - Improve - Control
It is so important to learn about and understand your finances. Practicing will lead to experience and that means the budget will become easier and easier to control. Eventually, the budget should become very straight forward to work on and in fact, some facets may become so controlled that it is not necessary to do some of the steps. Income, expenses and savings are the constants on your mind to manage your finances well.
2 - Follow Guidelines
Guidelines are similar to a cake recipe. You need to acknowledge the main ingredients and use them correctly. The simplest system is to make sure that spending plus savings aren’t more than the total income. This prevents debt. That means that savings aren’t at risk to cover the debt. For many people the spending part is tough so it may take some tricks to stay within the guidelines.
3 - Create Financial Goals
Creating reasonable financial goals makes it easier to focus on and understand what and why you are saving for the future. While all goals are important the most important is saving for emergencies. This is the one goal that is really needed and must not be used for anything other than a real emergency.
4 - Saving First
By putting savings away right after receiving income it is like hiding your money. Therefore, what you don’t see you don’t spend.
You can start small then work your way higher, even start saving for individual goals.
People that learn good savings habits find that it gets easier to save and the savings start to accumulate or become achievements.
5 – Spending, You can dominate it!
You don’t really have to keep up with the Jones’s. Overspending usually leads to debt. Some people say they will spend less next month but they rarely do. You need to keep up with what you can afford -spend within your limits.
6 – Avoid Bad Debt
Go easy on credit cards. As tempting as it is, don’t use credit cards if the funds aren’t available to pay off the debt. Lose control of plastic money is one of the most common reasons for debt.
if getting a loan: make sure it is easily paid off – never go for the maximum – stay under your limit
Don’t lend to family and friends unless there is some reasonable form of collateral or if the funds can be forgotten about and it doesn’t hurt your budget
7 – Balanced Budget
The main task of a budget is to control spending and saving and not exceed your take-home income.
A balanced budget is quite stress-free. It is always nice to see savings accumulate and not worry about bad debt. Practice leads to easy control.
8 – Different budgets for different people
All budgets have the same basic format and ideas but there are many individual aspects within those ideas. Adjustments can be made to any budget at any time, so long as the adjustments still create a balanced budget. Remember to allow time to learn and test some situations and find your style.
9 – Slow and steady
They always say that the stock market goes up over the long haul, not over the short-haul. That is how budgets work as well. While budgeting is not a fun method it is the safest method for most people to keep out of debt and accumulate savings. Saving by the month seems slow at first but over time the amounts accumulate and eventually it is time to buy that car or pay for a wedding and eventually retire.
10 – Worry about being happy first – rich second
Get rich schemes rarely work and in fact, they usually result in losses. Stay away from them.
Be patient and try to create a balanced budget with no bad debt.
Create goals and savings so that those things in life that are desired can be reached.
Then, no bad debt and accumulated savings will lead to happiness.
The most important factor in budgeting is about opening your mind for the possibility of controlling your finances. It can lead you to great achievements in your life.
KJ/DB