Shopping and having nights out can be fun until they leave a dent in your purse and a shortage of cash in the bank. So what do you do? Continue to spend anyway and stress later? Or enforce a budget?
Being financially confident requires some thought and planning.
I like to use the term ‘spending plan’ because unlike the word ‘budget’ it reduces the sound of the alarm bells ringing around what you can’t have!
Having a strategy around wealth is key for long term stability and blissful living. No matter where you are today, with a few pounds in hand or thousands, you can make the decision to be savvy with your money.
Think of it this way:
- To be financially stable you need to work out your living expenses, multiply it by 3 and have it placed in a savings account. If you are unable to do this right away don’t let that stop you! Work out what you can put aside and set it as a fixed sum to come out of your account each month into a savings account until you have accumulated the desired amount. It is too easy to avoid getting started with these plans because you don’t have the ideal sum to start with.
- To move up the scale and be financially secure you need to invest your savings and be getting a return that covers your basic living expenses for one year. And then progress to financial freedom and finally financial opulence. Chris Howard describes this beautifully in Instant Wealth – Wake Up Rich!
- If you haven’t already got a spending plan then get started! Another great source to read is ‘Change Your Life in 7 Days’ by Paul McKenna. Day 6 is all about creating money and he shares some fascinating insights on how money became the bartering tool of choice.
I have never been a fan of saving or had much faith in the bank system but falling short of cash each month is a great lesson in learning to think differently!
The truth is you have to find ways of adding value to make money and then use the money to make more money if you want to accumulate wealth. Investing is ideal for that. Yes it has its risks but so do banks… no comment required!
With small low-risk investments you can start to accumulate funds and if you leave them there to compound (investment interest on the interest) you can build a very healthy pot for yourself long term. The more risky investments tend to bring the bigger rewards but this is about doing something, however small, now. And if you have children aged 18 and over, encourage them to invest small amounts too. They’ll never have to depend on the state pension if they start young!
Check out these free online investment courses; it’s always worth getting a sound knowledge base before jumping in. Furthermore, as with all things financial, talk to an independent advisor before parting with any money.
Tip: If you have any financial issues that are causing you sleepless nights don’t ignore them. Be assertive and seek advice immediately. And also know your credit score which you can access via: www.experian.com OR www.equifax.com OR www.checkmyfile.co.uk
Regardless of your current situation being able to turn a corner and show your friends, family and children how to be better self-bank managers is a gift worth giving, bringing a better quality of life and financial confidence!