The recent economic tide has opened many eyes to how fast things can change and why you must be prepared. Financial plans help weather the storm, so you need to have one that works well for you. When creating the plan, you should implement certain financial hacks to ensure your net worth grows and your future is secured. They are small doable things that make all the difference in the long run, and in this article, you will get to know them and how to add them to your financial goals in the New Year.
Cook Your Meals
There are several benefits to cooking your meals. First, it’s cheaper. The amount spent on purchasing a meal can make more if you do it at home. That doesn’t mean you should never go out to buy meals; it simply means lower the number of times you do so. Home-cooked meals offer more food for similar prices.
Second, cooking is a life skill you enjoy developing. From the simple ten minutes meals to the complex ones, spending your time gaining confidence in the kitchen is not for naught. Third, when you cook, you know what ingredients you put in and can make suitable changes to your meal. You can avoid allergens and dietary restrictions or make healthier options to improve your body. Cross-contamination is also a possibility when going to food establishments that aren’t prepared to cater to your needs.
All in all, making food at home gives you the comfort of your safe space, bonding time with yourself or your family, and improving your health by limiting the number of unhealthy ingredients in your food. The lower cost for more value works as a hack for saving money.
Budget Your Money
A personal budget is a home budget that entails a financial plan that allocates income to cater to your needs and wants, such as savings, retirement and debt payment. When making a personal budget, you have to look at past and current expenditures to clearly understand how you spend your income.
The topic of budgeting often comes with myths and untruths shared by family, friends or the internet. Some of the more common myths are:
- Budgeting is time consuming. False. A budget is a primary priority for your financial health so setting aside an hour a month to work on it is not that much of a burden. If you create a reasonable budget, you can use it for a long time without having to redo and adjust it.
- Budgets Are Too Constraining. A budget is as restrictive as you allow it to be. If you want to maintain the simple pleasures of daily life, such as buying coffee, you still can. The only difference is that you put it down on paper and set aside enough money to cover it for the month. Your budget should accommodate and cater to your wants and needs.
- Budgets Aren’t Realistic. Your budget is a financial plan you create to cover your monetary wants and needs. Unrealism is adopting someone else’s budget with different circumstances and imposing that on yourself. It will be overwhelming and lead to failure
- Budgets Are for Those Who Are Struggling Financially. Just because it is sunny today doesn’t mean it will not rain soon. Life is unpredictable, so it is hard to determine your financial future. You can be comfortable today but unemployed tomorrow. A budget is a money management tool and a financial hack that will make it more predictable because you made the right financial choices.
- Budgets Require Too Much Math. It’s simple; you know how much money is coming in and allocate where it goes. There are budgeting templates that can help you in creating a reasonable budget for yourself. Applications have also been made for the same reason.
Budgeting has a lot of benefits, from money management, retirement, curb overspending and even helping you reach goals you set. Whether you want to travel or early retirement, a budget is a money-saving tool to aid your financial growth.
Want to learn how to create a budget? Please read 26 Best Lessons to Learn In Creating Personal Budget
If you spend more than you make, you will find yourself in debt. There are two types of debt, good debt and bad debt. Good debt increases your net worth, such as mortgages, student loans, small business loans and home equity loans. Bad debts plunge your net worth down a dark spiral. Examples of bad debts are payday loans, automobile loans and credit cards, as it makes it easier to swipe your way to financial ruin.
Don’t spend more money than you make is a financial hack that saves you money, heartache and stress. If you are in debt please read 8 Steps To Kick Debt From Your Life.
Build an Emergency Fund
This fund serves the need, in its name, an emergency. The unpredictability in life is something we all share; sometimes, we are up, and other times down. Having a financial cushion to catch you as you fall is beneficial for several reasons.
First, it reduces the level of stress that would plague you at that time. An example is if you lose your job from being fired, or the company collapses suddenly, you will need a financial cushion to fall on. Your rent payments, food and other necessities will be covered by this fund as you look for another job.
Second, it prevents you from going into debt. As stated earlier, debt is a result of spending more money than you have, especially in the case of bad debts. Not having an emergency fund could land you in a debt cycle that is very hard to escape. If your car breaks down suddenly and you don’t have money in your spending account to spare, you can dig into your emergency fund to have the problem fixed. The money you will save not paying constant interest rates will go towards other ventures, thus making it a valuable financial hack for you
Taking everything into account, you have to build an emergency fund for yourself if you care about your financial health. The highs and lows in your life will be better handled if you have an emergency fund.
Learn Marketable Skills
Growing comfortable is good; however, do not let it stop you from learning new things. Having some marketable skills is beneficial in many ways. Taking time out of your day to understand how the pipes of your plumbing systems work or your car will help you tackle minor issues instead of calling a plumber all the time or going to the mechanic for easily fixed problems.
A skill like programming or baking can be a secondary source of income that helps build your savings. Multiple sources of income are guaranteed to make your dreams a reality. If you want to travel, the money earned can go toward traveling or even buying a home.
Knowledge breeds confidence in a person. Learning these new skills helps you grow more confident and appreciate yourself when moments of doubt plague you. The wisdom found in the skills you learn doubles as a financial hack and a life hack.
Choose Your Career Wisely
When getting a job, you focus on having some financial security, but there is more to it. Take a moment to observe your career and see if it satisfies your needs intellectually, emotionally and financially. Sometimes, your source of employment leaves you miserable, drained and unmotivated. You may also find yourself going on a dead-end road with no opportunity to grow as that career has reached its limits.
What you need to do is check in on yourself. Observe your vision board and see if the job you have aligns with the goals you have set for your future. If not, you can start looking into what is needed to get into the career path that will fulfill your needs. Like our earlier point, you can take time to learn new skills that make you an attractive candidate for the job you want. Your career should not be looked at in the short term but focus on the long term.
Invest Your Money
Investing your money is one of the ways to make and gain the most out of your money. They work in conjunction with the financial goals and needs for the future, which is why you have to asses, analyze and determine your needs. There are several types of investment funds, such as:
- Mutual funds
- Real estate
- Money market funds
- Retirement plans
Your goals determine how much of a risk you are willing to take. If you want to build an education fund for your child, then a low-risk option is best, but if you are after building wealth, riskier investments are the right choice for you. An investment portfolio helps you grow your money instead of letting it stay dormant in the bank.
If you are unsure what investment to make, get an investment advisor to help you navigate and grow. When picking a trustworthy financial advisor, choose an advisor who believes in having a long-term relationship with you and not merely a series of commission-generating transactions. The second way is to ask for a referral from a friend or colleague.
Before you start working with them, you need to determine what advice or service you need and how much autonomy you can give them. Look into the educational background and certifications they have acquired and titles beside their names, such as CFA, CFP, or CIMA.
Financial security is not something to be taken lightly. Your choice in determining where to put your money makes a more significant difference in monetary growth. You might make or have made a bad decision which is okay; it is part of the learning process. Failure is allowed as long as you get back up, dust yourself off, absorb the lesson and move on. Your financial life ends long after your life and is centered around your decisions, thus making it essential t to educate yourself on the best way to use your money.