7 Financial Pointers That Everyone Should Know
When it comes to money, life can be confusing. All of us are trying to figure out how to make more money and better manage our finances, but what’s the real cause of all this confusion? Money is a heavily debated issue, but there are some core kernels of truth that are generally accepted in the financial world.
Here are three common reasons people often give for having money problems:
1. “It’s a difficult economy.”
Yes, many jobs pay too little while the cost of living keeps going up. But if this were true across the board, then nobody would prosper. Some people do well in any economy. There were even millionaires during the Great Depression.
2. “It’s difficult to keep track of all the numbers.”
It can be difficult figuring out some aspects of financial planning. But for the most part, if you can do 5th-grade math, you have all the skills you need to keep track of your money. After all, you’re just adding, subtracting, multiplying, and dividing numbers.
3. “Wealth building is a complicated subject.”
It takes considerable knowledge and experience to become a good investor. But much of earning, saving, and spending is common sense. Then again the primary reason people struggle with finances is that they don’t understand the basic rules.
7 Wealth Habits
Here are 7 simple rules that will help you to make more money and better manage it:
1. Create a budget.
If you talk to any financial coach, the first thing they would tell you is to create a budget. While this is sound advice, the real reason people don’t keep a budget is an emotional one.
Financial icon Dave Ramsey explains, “As you’re coaching people with budgets, you’re digging things out by the root. And when it comes to budgeting problems, they’re usually the symptom of something else going on.”
Before creating a budget, think about why you’re not keeping track of your money. If you don’t heal the emotional pain associated with money, your budget won’t work for you.
2. Put aside money for emergencies.
Just because you have plenty of money now, it doesn’t mean you will still have plenty tomorrow. Life has a way of throwing you a curveball and even if you’re a good batter you still might strikeout. Unexpected things happen, and usually, these financial crises fall into two main categories:
- Your reliable stream of income dries up. Maybe the company you are running loses a valuable client, or maybe you get laid off from your job altogether.
- You encounter an expense that exceeds your current cash flow. Natural disasters, medical conditions, an unexpected pregnancy, or your car breaking down are all good examples of this.
The best way to handle emergencies in the future is to save enough money now. Once you have extra funds in reserve, you can borrow from whenever you need to.
6. A part of all you earn is yours to keep.
Besides saving for an emergency, you should also save for future opportunities. Set money aside from every paycheck. You will then be able to take advantage of any opportunities that show up.
7. Do work that you love.
Finally, one reason people don’t prosper is that they hate their work. There are many possible reasons for this:
- Disagreeable co-workers.
- An unpleasant boss.
- Tedious work that no one would enjoy.
Still, one of the main reasons people hate their job is they’re doing the wrong kind of work that doesn’t suit their temperament and interests. As a result, they do a poor job. If you really want to excel financially, find an honest line of work that truly excites you. Then you’ll already have a built-in reason to do your best and bring home the bacon.
Start with the Basics
When it comes to building wealth, many people think they just need the right tricks to get wealthy. What you need first is the right mindset. By following these seven rules, you’ll be forming good habits in your life that will set you up for long-lasting success—both personally and financially.
3. Upgrade your professional knowledge.
While hard work plays a role in success, it isn’t the only factor in earning money. Some jobs pay ten to a hundred times more than others, and often a superior education gives one person an edge over another. While it’s not necessary to have a good education to become prosperous, it definitely makes it easier. Fortunately, we now live in a world where almost anyone can get a good education. There are many ways of getting loans, grants, or scholarships to go back to school.
4. Learn on the job—or on your own
You don’t have to go back to school to get an education. You can also learn on the job. Improve your education by taking on more responsibility and improving how you do your job.
Even self-study can close the education gap. This is particularly true in the field of technology where hands-on experience can be even more valuable than a degree. If you wanted to learn programming or web design on your own, you could easily find a mentor or take online classes. A company might hire you based on your portfolio alone.
5. Live within your means.
Earning a solid living does not guarantee the good life. Many people with high salaries still struggle because they increase their expenses as their income goes up. It is also easy to spend more than you earn by using credit cards.
When you live above your means, you are always in a state of confusion and inner conflict. By simplifying your wants and desires, you can keep more of the money that you make.