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Money Management Tips to Grow Wealth
Managing finance has become an essential part of your everyday life. If you are not managing your finance properly, you might face difficulty in the short and long term. One of the main reasons is that you are not planning your finances to meet your short-term needs and achieve your long-term goals. Perhaps you might have started this year vowing to grow personally, expand professionally, or grow up.
The term “personal finance” refers to how you manage your money and plan for your future. All of your financial decisions and activities affect your financial health, as well. Figuring out how to invest money can be a real challenge, especially when there is no shortage of information on investing in the digital age. However, too much information can be overwhelming. Here are some money management tips for your wealth growth.
Create a Financial Calendar
If you don’t trust yourself to remember to pay your quarterly taxes or periodically pull a credit report, think about setting appointment reminders for these important money to-dos, in the same way you would an annual doctor’s visit or car tune-up. A good place to start?
Our ultimate financial calendar. By creating a financial calendar, you will have a written plan to tackle debt or get your finances in order. You can use Excel or purchase a calendar or day planner to track your budget and spending, depending on what works best for you. Financial calendars enable multilingual descriptions of calendars, years, and periods to be used on reports and inquiries.
Set Specific Financial Goals
Use numbers and dates, not just words, to describe what you want to accomplish with your money. How much debt do you want to pay off- and when? How much do you want to be saved, and by what date?
By setting short-term, mid-term, and long-term financial goals is an important step towards becoming financially secure. If you aren’t working towards any specific goals, you’re more likely to spend than you should. You’ll then come up short when you need money for unexpected bills, not to mention when you want to retire. You might get stuck in a vicious cycle of credit card debt and feel like you never have enough cash to get properly insured, leaving you more vulnerable than you need to be to handle some of life’s major risks.
Allocate at least 20% of Your Income towards Financial Priorities
By priorities, we mean building up emergency savings, paying off debt, and padding your retirement nest egg. Seem like a big percentage? Here’s why we love this number.
The 50-30-20 rule puts 50% of your income toward necessities, like housing and bills. Twenty percent should then go toward financial goals, like paying off debt or saving for retirement. Finally, 30% of your income can be allocated to wants, like dining or entertainment.
Money Management Tips: Work Hard Now
When I think back to how I could advance my career, I remember when I was an unpaid intern at the brokerage firm that hired me. As an intern, I worked 12 to 15 hours a week, showing up when I was told to show up, dressed, and ready to impress. The majority of my duties were shredding important documents, filing, and other basic administrative duties. Even though the work was boring, I did everything that was asked of me and above. My work ethic and drive spoke for itself. After that summer internship, I was offered a full-time position.
If you have a job, even though you might not like that job, give it everything that you’ve got. Treat the company that you work for as if you own it. Imagine then that you’re the CEO. How would you approach your daily duties differently if more was on the line? It isn’t easy to find great opportunities. It’s possible, but it isn’t easy. For now, I recommend that you focus on working hard. People around you will start to take notice. Just like I was offered a full-time position because I worked hard as an intern, you will find doors of opportunity opening for you when you give your work all you have.
Don’t Ever Co-sign a Loan
If the borrower—your friend, family member, significant other, whoever—misses payments, your credit score will take a plunge, the lender can come after you for the money, and it will likely destroy your relationship. Plus, if the bank requires a co-signer, the bank doesn’t trust the person to make the payments. Bonus tip for parents: If you’re asked to co-sign a private loan for your college student, first check to see if your kid has maxed out a federal loan, grant, and scholarship options.
Money Management Tips: Spend on Experiences, Not Things
Putting your money toward purchases like a concert or a picnic in the park—instead of spending it on pricey material objects—gives you more happiness for your buck. The research says so.