Have you ever wondered why some people have more savings and a financially better-off life, while some don’t? Even people who had the same means and earnings sometimes end up in starkly different places when it comes to their finances later on in life. And it can be safely said that this is because the way they planned their finances varied greatly. What else can be the reason? If among two people who earn the exact same amount of money with similar expenses, one of them ends up without any savings at 50, and the other one with quite a bit of it, it can only mean one thing – the person without savings didn’t do the right things with their money, while the other person spent and invested wisely.
Without a doubt, we all want to be the guy who used his money wisely. Because none of us really want to end up being financially vulnerable, especially later on in life, right? So, is there a secret to being financially secure? Some magic formula, perhaps? Well, not really. All you need to do is take some small simple steps to ensure that your money doesn’t run out.
Here are 8 seemingly small steps that go a long way in ensuring that you do not spend all your money on wrong or unnecessary things.
1. Have Kids Only When You Are Ready
And by ready, we mean both financially as well as emotionally. We live in a strange world where, once we are married, it becomes everyone’s business to find out when we are going to have a baby. But it is best to not give in to such pressures because raising a child is not cheap business.
Right from planning the delivery to kindergarten, to school, college, and finally university, every step of the way is extremely demanding when it comes to finances. So, the best thing to do before making a baby is to make a proper plan and save up. So that once your baby comes into the world, instead of fretting over savings, you can spend your time fussing over your child.
2. Ask For A Raise When You Think You Deserve It
Many of us never ask for a raise out of embarrassment. Perhaps it’s a part of our culture where we are taught to be humble and never put ourselves before others. Or just plain shyness. Or maybe even a lack of self-confidence. But this is a mistake many of us make. It is always a good idea to go and speak to your boss and ask for a raise and promotion because unless you are getting a raise, both financially as well as in terms of designations and promotions, there really is no point slogging away those long hours at the office.
3. Better To Rent A Place Than To Buy One Without Planning
While logically it may seem like buying a house makes more sense than renting a place, there are a lot of hidden costs involved in getting your own place. One of the most obvious ones is, of course, the furniture and other aesthetic things that you’ll need to do up the house so that it becomes habitable. Unless you have a proper plan and means to be able to afford a house, just hold on and save up first. It’s better that way than going into it headfirst and then drowning in debts.
4. Prioritize Health And Education Over Everything Else
It sounds very romantic to say that you spent your first salary on buying your dream car or bike. But, it is actually not a very wise move. The things that you actually need to invest in when you have just started earning are your health (over everything else) and your education. If you know of a course that can help you move up in your career, do not hesitate – just go ahead and do it! Trust us, the future you will really thank the present you for doing this.
5. Stay Away From Blindly Investing In Something
When you have the money, many people will try to convince you to invest in one thing or the other, and one scheme or another. The wise thing to do in this case is to only invest in something that you are a hundred and ten percent sure of. Invest only if you trust the other party absolutely, or have recommendations from experienced investors. Many have lost almost all their money to fraudulent schemes and unwise investments. Don’t become one of them.
6. Stay As Debt-Free As You Can
The key to being financially stable is to be absolutely debt-free. The more you borrow, the more financially dependent you become. Yes, there are times when borrowing becomes imperative. Like when you need to take an education loan. But you can make sure it doesn’t become a burden by making sure that you repay this on time, and during this duration, you make a conscious decision to not borrow anymore till the entire amount is repaid. Trust us, this really works.
7. Don’t Buy Impulsively
With newfound financial freedom, many of us tend to spend on things that we do not really need just because we can. That is a very bad idea. Always make sure that you keep a tab on all your expenses and never spend on anything that is not useful or utterly important for survival.
8. Make Pension Plans
It might seem like there is a long time before you retire. But time passes by before we even realize it. Hence, it is best to start saving from now onwards for your old age. You don’t want to turn out like the grasshopper during winter.
Do you agree with this article? Do you think you’ll be able to take all of these steps to secure yourself financially? Do you have any other suggestions? Let us know in the comments!