The key to living your life on your terms starts with investing in the primary source of your income. As an individual, you need to invest in yourself and how we do this is by learning how to save money!
You may ask how is this type of investment possible when already your salary seems to be just enough to get by, well as hard as it may seem saving should be top of the priority list and naturally the easiest thing to do especially if you have a goal.
However, there are hidden treasures that lie beneath the surface when it comes to saving money let me give you some tips and guidelines on how this can be something easier to do and also create a goal-oriented purpose in your everyday life.
Enhance Your Financial Literacy
While this may not be at the top of everyone’s to-do list, understandably so, learning financial literacy terms may be the key to unlocking your financial freedom. The more you understand what these financial terms are, the easier it becomes to identify and apply them. Let's start with the five basic components which are integral parts of economic terms.
Earn
This one is simple! Any income stream is an income - meaning you now depend on this source to provide for your necessities such as rent, food, loans transport etc. This term is most familiar as earnings from a job. However, an income can be determined by any source of funds that you may receive including rental income or interest from an investment.
Spend
Seen as the reward of hard labour, we all know how to spend money. Ideally, the spending ratio would equally balance the income. This is seen as money spent on living priorities that keep a household functioning. Always keep in mind the types of expenditure we have needs vs wants.
Save
This is the most painful, yet the most crucial part of being an income earner. You never want to be left without savings or a contingency fund. For example, if your fridge breaks due to an electrical fault and is not insured what do you do? That's when that savings account comes in handy for repairs or to purchase a new one. Here are a few small tips for saving money - Budget! Budget! Budget!!
Borrow
Always shop around for the best interest rates before deciding to borrow from any financial institution. This has a high impact on your credit score and later on, may affect your rating hence preventing you from getting any further credit in future. Repayments are also highly affected by this so your instalments will be determined by the interest rate.
Protect
Insurance is most important for your peace of mind, especially if you are a source of financial aid for your loved ones. While life insurance always comes to mind when protection is mentioned, employment, medical, home and car insurance are important too. Don’t leave yourself and your family without some form of protection in the event of the unexpected.
Avoid Risky Bets with GamStop: Make Informed Choices
We often look for get-rich-quick opportunities that promise a 150% or more return on investments. When it comes to gambling on sports events, a variety of options are presented to people. These aren’t always schemes that are based on online casino gambling. They can be fake investments in cryptocurrency, miracle medication, postal lotteries, etc.
To prevent any problems, UKGC implemented the GamStop scheme that allows individuals to self-exclude from online gambling activities for a chosen period. However, not all players came to terms with such news and began to find a way to cancel GamStop and resume gambling again. So, recognizing that technological solutions alone might not be sufficient, the UKGC also worked on fostering a culture of responsible gambling within the industry.
While professional gamblers exist, they have found a niche they like, lost a lot in practice and learned the art of stopping even when losing. Gambling is not the gold mine many people advocate. It’s a form of entertainment and not an income. Accepting this makes it easier for you to stay away from activities that require you to take a gamble.
Limit Unnecessary Expenses
Eliminate the small unnecessary costs eg, buying lunch at work instead of packing lunch.
The small things matter such as when you occasionally want to spoil yourself with a nice pair of shoes or a decorative item while shopping online. Think before you buy and understand your needs vs wants factor. The double back factor of having to recoup money can be detrimental to your mental and financial health.
Yes, there may be times when funds are extra such as those received from a bonus, investment or occasion money. These can be used to fill in the reward needed to get yourself something for your consistency in financial diligence. Total abstinence is the reason people end up spending more than they have.
Always aim to spend what you can afford. If you have to go into debt to acquire something, then it falls into unnecessary spending, regardless of what your spending trigger says. Be diligent and check any new offers for electricity, water, gas, credit cards and insurance.
Secure Your Future: Invest Wisely
The instant gratification society created has led many people astray. Living on credit is one of the many reasons communities are struggling globally. If you don’t want to live like a statistic, consider your future and start investing in it. While savings play an integral part in financial discipline, ensure you aren’t missing out on other opportunities.
- Investments: Consider making investments that come with monthly or annual returns. This can be in five-year bonds or property. As non-expiring commodities, they offer you the best chance to achieve your projected monetary goals.
- Create a side hustle: Create a business by turning your preexisting passion into a financial assistant. As long as the idea doesn’t require a huge investment to get it started, then give it a go. Other forms of adding extra funds, while investing in your future include online surveys and doing digital tasks.
Conclusion
Always keep in mind your plan should consist of short-term goals and long-term goals. Write these down including steps on how to achieve them. Don’t be rigid and ride the tide of change. Most importantly, live your best life by enjoying and celebrating your financial milestones.
