Source: Unsplash | Glenn Carstens-Peters
How do you plan on reaching your financial goals? If your answer is either, “Working until I die,” “Winning the lottery,” or “Robbing a bank,” then you could probably use a bit of fiscal planning,
Fortunately – unless your objective is to become a multi-billionaire – there is no overly complex process involved in achieving relative financial security. It’s an incremental process that requires vigilance, frugality, and time (not to mention, a steady income). If you have a steady income, you’ve already cleared the most difficult hurdle. Here’s what you need to do next.
Open an emergency fund. According to a report published by the Federal Reserve, 40 percent of Americans could not come up with the funds to cover a $400 emergency expense. The sooner you have emergency funds put away for sudden, unforeseen costs, the better off – i.e., more secure – you’ll be. Funds over time will be augmented thanks to interest rates and so this can double up as both an emergency fund and a savings plan for the future.
Reduce your existing debt. The cost of carrying debt can be enormous and ruinous. If you’re carrying debt from student loans, mortgage, your car, or credit cards, you’ll want to make sure you’re paying it off in a way that reduces your interest and fee burden. Many companies offer low-rate, high-reward credit card services that can help you earn valuable points and lower your fees.
Moving Home – Have you thought about moving home to fix your financial situation? You could very well have money locked in your home and downsizing can help you out financially, check here now to see more about the value hidden in your home. Of course this will incur some costs such as solicitors fees, moving services etc. but it could very well help you in the long term to reach your financial goals.
Second Income – Hard work really can pay off and so a second income, whilst it should never been done long term, can certainly help to improve your financial situation in the short term. Seeking out online work, sitting up a small business or even buying and selling can be great ways of bringing in a little more cash to the household. Make sure that you don’t work yourself into the ground, but a second income will reduce the time you have to spend money and bring in more of it.
Focus on retirement. Whether or not you plan on completely stopping working once you reach a certain age, the fact is that most people simply won’t be able to continue working high-stress or physically demanding jobs as older adults. Having retirement funds ready for the point when continuing full-time work becomes untenable is essential to long-term financial security.
While the question of how to make enough money to meet all of our lifestyle needs and objectives will be – for many of us – difficult to answer, addressing these three essential components of finance will help you build a nest egg that will continue to feed you well into your golden years.