This is 3 Financial Planning Tips
Have you ever wondered how you would pay for an unexpected flat tire or medical procedure? Or better yet, how you would even begin to save for this type of unforeseen event? Some would suggest to put it on your credit card or maybe even take out a loan. Unfortunately, these are just everyday occurrences that most people just aren’t prepared for financially.
My goal is to share 3 Financial Planning Tips to proactively prepare you for any unplanned financial circumstance.
Tip #1: Pay yourself first
Working is just apart of life and oftentimes some may feel as though they are just working to pay bills. However, it is very important to pay yourself first. You work hard for your money and by the end of the year you should have something to show for it. When putting money aside for yourself I would recommend putting aside at least 7-10% of your bi-weekly income if possible. In doing so, you can begin fund an Emergency Fund or invest in the stock market. Emergency Funds often thrive and accrue interest when placed in a Certificate of Deposit (CD) or Money Market account.
Tip #2: Understand your spending habits
There are two ways that I often categorize my spending when budgeting and that is spending out of necessity and spending using discretion. Necessity spending can be considered as using your finances to pay for housing or utility expenses. Discretional spending would be considered as using your money to buy a birthday gift for a friend or going out to happy hour after a long day at work. Spending using discretional measures isn’t a mean to stop you from simply spending money. It is meant as a reminder to think about the choices that you make and how they can affect your finances in the long run.
Tip #3: Diversify your income
This simply means to not keep all of your money housed in one place. The rule of thumb is to make your money work for you. Research some stocks, fund an IRA or look into Forex Trading. Never let you money just sit dormant in a checking account. Take advantage of the interest and dividends that you can accrue monthly to expand your wealth.
I encourage you to take some time today to assess your finances and think about where you would like to be in the next 5-10 years. Write down your financial goals and break the cycle of being financially unprepared.
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