As we talk about frequently on this site, the rules of finance haven’t changed too much at their very core but the generational split of perceptive with regards to those rules certainly has changed.
There’s no denying that the millennial generation is in a trickier financial world than Generation X and generations before that. However, that doesn’t mean you’re any less capable of dealing with financial obstacles than your parents and their parents were.
You have the potential to do a lot with your money to secure your future in a very uncertain age but it’s all about taking the time to learn and conduct research into what you should be doing with your money. If you feel that you don’t know enough about handling finance or you want to see whether your current financial strategy is a sensible one then here are some pieces of advice which just might help.
Self-discipline and structure are both important
The key to a financially stable lifestyle is resilience and self-discipline. Whether you’re a high-wage earner or a minimum-wage earner, everybody has the power to either live within their means and have a comfortable financial future or make poor decisions and end up bankrupt or in debt.
The point is that your money is entirely in your hands. If you want to ensure that you protect it in the best way possible and not spend beyond your means then you need to develop a budgetary plan. Calculate the cost of all your necessities in life including rent, food, and utilities because you want to be sure that you set aside enough of your income to cover these things every month.
After calculating your budget and the cost of your bare necessities, the remaining money is your excess. Still, that doesn’t mean your disposable income should entirely be spent on non-essentials. This is where self-discipline comes into play.
You need to be smart with your money and keep track of all your expenditures. Try to limit your spending on luxuries where at all possible so that more of your remaining money can go towards savings and other investments. Practice the 30-day rule if in doubt; when you see an item you want to buy, see if you feel the same in 30 days. If you’ve forgotten about it after that amount of time has passed then you saved yourself a lot of money.
Spend money to make money
Again, the goal to handling your finances isn’t to avoid spending anything. You do need to spend money to make money but you should be looking into opportunities which provide returns on your investments. You might want to check out sites such as Investormint if you want to get into online options trading.
There are lots of low-risk and high-reward investment opportunities for traders to multiply their money if you know what you’re doing with regards to that world. The point is that you don’t have to just sit on your money to keep it safe; the best way to do is to find ways to increase your existing savings and earnings so as to better secure your financial future.
The emergency fund
Finally, as we mentioned earlier, you need to always think about saving money.
Starting an emergency fund is a good place to begin because even individuals with the most highly-paid jobs can find themselves in unexpected car accidents or with medical issues that leave them with a costly bill. If you don’t practice good habits in terms of saving your money rather than spending it then you might find yourself with unexpected bills that you can’t pay. And you want to avoid borrowing large amounts of money wherever possible in life.
Set aside 10 per cent of your monthly income and you’ll have a sizeable savings account by the end of the year. It’s as simple as that.