We all know that spending our money properly is difficult to sustain. Good for us however, there are wise strategies that we can apply to live a debt-free life and least affected by inflation, as we also replenishing our piggy banks. As we rack up hours in our daily working lives, we should be starting to prepare for our retirement life. Another great news, we don’t have to wait to reach the golden years to enjoy our fruits of labor. This early, if we manage our finances properly, we can begin living the life we always wanted. Who doesn’t want to hang up that work uniform or boots early to have more time doing the things we enjoy, such as traveling the world?
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| Take a leap to Financial Freedom |
To help you get closer to that financial freedom, here are some ways on how we can eliminate outstanding debts, make sound investment decisions, and properly save money.
Inflation is a way of life, so better
prepare for it
No matter how the global economy does, inflation will always result in a decline in purchasing power. Therefore, you should always anticipate that the value of your savings will decrease by the time you retire. To counteract this, you should explore investing options that can generate a higher rate of return than. In short, look to diversify your portfolio by looking at investment opportunities that may yield more than what your bank currently offers.
You can put your money into a startup, an equity fund, the stock market, the foreign exchange market, or even virtual currencies like bitcoin. While it's true that you can't eliminate risk entirely when investing, you can certainly lower your exposure to it by doing your homework and studying the market and economy thoroughly.
In short, you should do your homework if you want your savings to at least catch up with future inflation rate. To help you keep track of your money better, you can use online tools such this useful website called Savings Calculator to correctly compute, forecast and plan your investment and savings.
Don’t go down the Debt rabbit
hole.
“Easier said than done” as one would say since we’ve all been there: borrowed money and had a hard time paying it off. Nonetheless, there is a way to liberate yourself from debt more quickly if you come to understand the sources of how you accumulated debt and know how to handle it.
Everyone with a debt problem should read this helpful article outlining the very doable process to getting out of debt, and then put those steps into practice in their own money management. Learn how to arrange your debt and identify its sources, such as frivolous credit card expenditures, late mortgage payments, and more, in this article.
Finding out how much money is coming in and spending it wisely are two other suggestions, as is breaking down your debt repayment into manageable chunks with concrete goals.
The next step in your plan to get out of debt is to cut out any unnecessary spending and establish an emergency fund, which may require you to look for and commit to a new source of income.
Since paying off debt involves more than just the monthly installments, especially with compounding interest on loans. Through careful budgeting, you can quickly gain ground and reduce your debt load.
Set up a savings goal for yourself. You can monitor your finances through this another helpful online tool called Savings Goal Calculator.
Invest in Variable Insurance
An investment in variable insurance serves three important purposes. It provides you with the opportunity to increase your money by investment in a variety of vehicles such mutual funds, bonds, stocks, fixed income, and money market funds in addition to providing you with life insurance and health insurance that covers hospitalization bills for serious illness.
Many large insurance providers, including the industry pioneer Pru Life UK (also known as Prudential plc), offer insurance policies in which a significant portion of your premium payments is invested in one or more investment accounts, giving you the opportunity to grow your fund while also providing you with life and health insurance protection.
Since it is a well-known fact that a serious sickness may quickly drain a person's financial resources, purchasing health insurance that will protect you from losing all of your life's savings on a protracted hospital stay while also providing a substantial growth potential seems like a no-brainer.
Take care of your physical health
Of course, you'd like to spend your retirement years in good health, allowing you to travel freely and enjoy the results of your job. To accomplish this, you must begin prioritizing your health right away, as doing so can save you money on future hospitalization and treatment costs.
The longer you live, the less money you will have to pay on rising health-care costs.
Make saving a habit and begin
early
US Senator Elizabeth Warren expanded on the "50/30/20" notion in her book "All Your Worth: The Ultimate Lifetime Money Plan," stating that one should spend 50% of their after-tax income on needs, 30% on wants, and 20% on savings.
You can tweak this method to accelerate your debt repayment by inserting "debt payment" in your "needs" allocation. As a result of treating mortgage and credit payments as a necessity that must be met promptly, your 20% savings will all go directly to your retirement fund.
Furthermore, it is critical to begin saving early in order to benefit from the so-called "magic of compound interest," which states that "the more often your money produces interest, the faster and larger your balance will increase." This is possible whether you keep your money in a bank or invest some of it in high-performing equities or equity funds.
Getting into the habit of saving early will give your money more opportunities to grow.
