Saving money might be the key ingredient for financial success. It provides security and gives you options. Saving money is important for many reasons including:
For an even greater incentive to save, compare the results of spending $100 more than you earn each month for ten years to spending $100 less than you earn each month for ten years. By spending $100 more each month, you will be $12,000 in debt before interest is even calculated; spend $100 less and you will possess $12,000 before you total the interest earned: a staggering difference of $24,000 at the end of ten years. The difference between sinking into debt and walking on the firm ground of savings can be a matter of a few dollars a day.
Spending less than you earn is one of the most important financial habits to develop. If you don’t, you will never get ahead. In fact, it does not matter how much you make – if you spend more than you earn you will be in financial trouble. Once you start spending less, you will no longer be living a paycheck-to-paycheck existence. This will take away stress that cannot be measured solely by your bank account.
Debt can be the major factor preventing you from having financial security. Many times we find ourselves paying lenders first which leaves us little or nothing to pay ourselves. The money you spend on debt could instead be used to build an emergency fund, invest for retirement, or even take a fully paid for vacation. Once you manage and eliminate your debt, you will have the freedom to use your money in ways that will help you become more financially secure.
Saving for retirement can be looked at as creating a freedom fund. It is about building the future you want. It means setting money aside right now to make your Golden Years all you want them to be. One day most of us will stop working. This might be because we no longer want to or are physically unable to. Start preparing now for these days.
Protect What Matters
You can make all the proper financial decisions and one slip off a ladder can derail this hard work. While we don’t like to think of bad stuff happening, it does. This is why it is important to have the proper insurance policies in place to protect you and your family from the dangers of life. Policies to consider include homeowner’s/renter’s insurance, disability insurance and life insurance.
Plan Your Legacy
A legacy can be defined as something transmitted by or received from an ancestor or predecessor or from the past. It is an impact that you make even though you are no longer living. While many times a legacy includes some sort of inheritance, there is more to it than just material things. Leaving a legacy is like tossing a rock into a pond. There’s an initial splash followed by ripple effects that continue once the rock has disappeared. You might have a small rock to throw or a big boulder, but each one of us will leave something behind us. It’s up to us to decide how far those ripples will travel!
Most of us will earn most of our income through our place of employment. However, there has never been a better time to look at ways to supplement our salaries and build wealth. From becoming an Uber driver to delivering groceries, the options are unlimited. The following are some actions you may want to consider to help boost your wealth:
- Become A YouTuber
- Start A Blog
- Write An Ebook
- Turn Your Hobbies Into A Business
- Rent Out Unused Space
The above list was just a small sampling of side gigs that could help you build wealth. Be open-minded and see what you can come up with.