Ever wondered what are some of the best things you could do for your money and your finances future? The following is a list of some of the smartest things you could do for your finances.
1.Develop a Budget and Finances Plan
If you’re spending more than you’re earning, you will struggle to get ahead. In fact, it’s one way to know that you might be headed for trouble with your finances. One of the best ways of ensuring your earnings are more than your expenses is tracking your expenses for a month or so and then creating a budget based on that. This can be a very simple budget, so long as you have one.
2.Pay off any debt and try staying out of debt
One of the key things to do for your finances is to pay off all of your debt. To do this, focus on the most expensive debts you have. This could be loans and credit cards, which typically have the highest interest. When you’ve paid all of this debt, the next step is to focus on paying your mortgage.
For mortgages, it’s wise to consider halving your monthly payment so that you’re paying it bi-weekly. You can then pay extra once you can afford it. This could help to shave years off the mortgage and save you tens of thousands of dollars in interest.
3.Prepare for your future with savings goals
It’s vital to save money for your future. If you fail to set savings goals and work towards them steadily, you may have to rely on credit whenever things get tough. You might find yourself working through your retirement years to supplement your meager government pension. Entering retirement may also become impossible or delayed if you’re in debt as you won’t have enough money to make all of your payments.
Start saving money regularly, perhaps using a Tax-Free Savings Account (TFSA) or an RRSP, or both.
Figure out how much you will need to comfortably retire, plan for it, and then start saving. This money can be great for a rainy day fund, in case you suffer another unexpected financial setback or lose your job.
Ensure that you have ample insurance. Accidents can happen. 1 in 4 people get hurt while on the job. Natural disasters can also easily cause thousands of dollars in damages to your home. So, make sure that you have insurance for the lifestyle you lead and the place you live.
Write a will and choose who will get your assets and take care of your kids in case you pass on. This will let you choose who benefits from all of your hard work.
4.Start saving as early as possible – it’s never too late to start
With the magic of compound interest in mind, someone who starts saving early in their life for retirement, even when the rates are low, doesn’t need to save as much of their income as people who begin saving later in life.
When two people start saving for retirement, but one starts at 21 while the other starts at 31, the 21-year-old can save $100 every month until they’re 65 to accumulate $253,000 at their retirement, assuming a 6% rate of return. The one who starts at 31 will have to save about $190 a month to achieve the same amount by 65.
The second person would have to pay almost twice as much every month to make up for waiting 10 years to start saving. It’s never too late to start. However, the sooner you start saving money, the better.
5.Do your due diligence before making major purchases or financial decisions
Many people will generally do more research when buying a phone or a TV than they will when buying a home or making an investment. Ensure you are not one of them. Saving for retirement and buying a home are some of the biggest financial decisions that most people will have to make.
6.Just Sleep on It – Don’t make hasty finance decisions
There are no major purchases or financial decisions that have to be made on the spot. In fact, making hasty financial decisions or feeling forced to do so is one of the warning signs that the deal might not be as great as it seems.
All of the worthwhile investments will be there another day so long as you’re patient enough. It’s better to just wait and learn a lesson on the cheap than rush into something and get an expensive lesson.
Spending time when making big decisions, considering alternatives, and getting expert information and/or opinions will go a long way. They are wise things to do every time you’re making a financial decision.
7.Stay Married for Your Finances
Several studies have demonstrated that married people tend to earn higher incomes, live on 25% less compared to what comparable singles need on the same lifestyle, and have twice as many assets at retirement. So, statistically speaking, staying married is great for your personal finances.
Have any questions? Contact The Plant Team today.
