How often have you succumbed to your over-spending habit and impulsively bought things you didn’t even need? How often have you felt guilty after over-spending and completely ignoring your financial health?
Don’t worry; most of us have made irrational and impulsive buying decisions at least once and regretted them shortly after. The key is to avoid them in the future.
Financial decisions are extremely important for your future as they impact your life significantly. Financial calls are often tough ones, and it isn’t everyone’s forte to balance their daily expenses, investment portfolio, and recreational spending.
Financial awareness is the key to financial independence. It cannot be stressed enough. The more aware you are about your financial health today, the brighter your chances are of effectively managing your finances in the future. Every day is a new opportunity to sit down and start planning how you will utilize your finances for yourself.
Here are a few tips for beginning your journey towards financial independence.
1. Draft A Will
Drafting a will is a crucial financial decision. If you are someone who wants their assets to fall into the right hands after you are gone, then a will is the right path to achieve this objective.
A will is a legal document that states your wishes about dividing your assets after your death. You have the power to decide who receives what from your assets. It can be anything from the money in your bank account to a piece of land you own.
If you die before drafting a will, your assets will be distributed according to the local court’s decision, and they will not be consistent with your wishes.
If you don’t know this, wills tend to reduce and sometimes even eliminate family disputes over property and finances. The easiest way to draft a will is to hire an attorney who will take care of everything.
2. Make A Budget Plan
No matter how much you earn, always make a budget plan. Balance your expenses in a way that you save at least 30 percent of your salary or income. Invest this 30 percent in a way that yields profits for you.
Never spend more than you earn. Track your expenses and see where you can cut some of them. Your budget doesn’t have to be a long and complicated one. It can be a simple one-pager that keeps you on track.
3. Rainy Day Savings
The importance of having an emergency fund cannot be stressed enough. It can get you through a rainy day and can even be your key source of spending for expenses in case your financial health is deteriorating.
Have at least 4 to 6 months of expenses in your savings for the financial crisis. Create a savings plan and be realistic about it. Create small but achievable goals for yourself, and you’ll be able to have enough saved up in no time.
4. Stay Out of Debt
Make sure you pay off all your debt in due time. Start with credit card bills that have the greatest interest rates and then your mortgage expenses, if you have any. Try paying mortgage expenses bi-weekly and as quickly as possible; this can only happen if you cut down on unnecessary expenses for a while.
It will eventually save you thousands of dollars in interest, and you will have possession of the property much quicker.
5. Build An Investment Portfolio
Make sure that you invest in the right place. You may be investing in stocks, mutual funds, securities, bonds, cryptocurrency, and even real estate. Diversify your investment portfolio. Do not put all your eggs in one basket. Try looking for different high-return financial resources you can invest in.
You will suffer losses, too but remember to focus on the bigger picture. The more places and resources you invest in, the greater the chance to become financially independent.
6. Preparing For Retirement
Create a retirement plan for yourself to enjoy the golden years of your life without any financial burdens. Make effective and good investments. As stated in the last point, look for different modes you can invest in.
Once you start investing and see the returns on that investment, you will be motivated to keep doing it.
It may seem daunting now, but it will pay off. Keep you’re spending in check and look for ways to invest in long-term and highly profitable assets like real estate.
Even after you retire, you can use the money from your retirement plan for further investments and still keep making money without working strenuously.
7. Get An Insurance
Getting insurance is also extremely important. You can protect yourself and your loved ones when you have purchased the right insurance policy.
Different policies include health insurance, business insurance, renter’s insurance, car insurance, and even education insurance.
Before opting for insurance, it is essential to research properly to ensure you get the best policy. Opting for insurance haphazardly might not benefit you in the long run.
These were all the basic things you needed to know before starting an online writing business.
The road to owning a business is full of difficulties, but it is all worth it in the end. Don’t rush the
process; take it slow and be patient.