7 Ways To Take Your Personal Finances To The Next Level
We’re sure everyone is dreaming about waking up one day financially free. It can’t happen overnight. You need to work hard and work smart to fulfill that dream. You need to look constantly for new sources of income, and focus only on those that present the best opportunities. There are seven ways anyone can use to take his finances to the next level. It’s up to you to decide which of these tips may work best for you. Remember them and finally, start living the life to the fullest.
1. Get rid of debt
Living in debt is exhausting. It is hard to fulfill your dreams when the thought about your debts stuck in your head. Just imagine how amazing a debt free life is. The first thing you need to do is to reconsider your expenses. Think how you can cut them. Learn how to delay a quick, expensive satisfaction to get that desired financial freedom. For example, you can pay off your loans quicker. If your car payment is $300 a month, you can pay an extra $25 or $50 if possible. You will hardly notice the absence of sums like these. This will also allow you to save money on interest. Just make sure whether your lender lets you pay off your loan this way.
2. Open a checking account for bills
A lot of banks allow us to open a checking account for free. Why don’t you create a separate account just for bills? Link it to your everyday account. Each month transfer a certain sum of money needed to pay the bills. If you have a checking account just for bills, you will not only successfully pay them, you will also better understand how much “spendable” money you have.
Save at least 10% of your income. For every $100 you earn, put $10 aside towards your retirement or other long-term plans. Get in the habit to do it automatically each time you’re going to buy a new gadget or even going out. Save more if possible, but 10% is the minimum needed to wake up one day financially free.
4. Round up
Our bills are not round numbers. When you save 10% of your income or transfer money to your checking account for bills, create the habit to round up. For example, you have a $77 bill, instead of transferring the needed $77, you can round up and transfer $80 or more. The remainder is small and will be forgotten. In a while, you’ll notice a nice sum of money in your checking account.
5. Keep a cushion
Keeping a cushion in your everyday checking account will give you the feeling of a small yet important financial freedom. The cushion will help you prevent overdrafts. This is the sum of money you never use to pay bills. It could be $200 and more, whatever you can afford. The size of the cushion is up to you. This cushion may become one of your best financial friends. It will protect you from overspending.
6. Take risk
Don’t be afraid of taking risks. There are a lot of options you can use; stocks, shares, bonds, etc. Before you make a decision to invest, that risk should be studied and analyzed well. Some financial deals seem too good to be true; you need to stay away from them. Remember that without taking risk, it’s hard to get rich.
7. Invest in passive income
Most people earn their active income. You spend your priceless time to make money, not enjoying your life. Your activity produces money. The real key to financial freedom is passive income. Invest money earned from active income in passive income like real estate, royalties, mutual funds, etc.