The moment you start making some money, the feeling is so liberating that there is nothing you can do but spend. Unfortunately, that is exactly where you make a mistake. By the time you realize that you have made mistakes, it will be too late, and you will have missed plenty of opportunities to save – a big blow to your personal finance!
7 Hacks That Help You to Manage Your Own Personal Finance:
If you face difficulties gaining control over your personal finance and life, you have come to the right place. Simply scroll down to find out how!
1. Build Your Cash Cushion
If you don’t know what a cash cushion refers to, it is basically the cushion money that can cover expenses for three to six months during any financial emergency. It might sound impossible to you, but this goes a long way toward keeping your personal finance secure. Also, this way, you are prepared to face any financial emergency without much worry.
At the same time, your life stays good too. For example, during any financial crisis, if you don’t have emergency funds to support you, your entire life will simply fall apart. Thus, building yourself a comfy cash cushion is exactly what you need to ride over any crisis!
2. Keep Investing
There’s nothing much that you can do without investing. Yes, savings are great, but what about multiplying that money? If you have a stable 9 to 5 job, then chances are you get a fixed salary and the occasional incentives. Now is that really enough for anyone to grow their income? We don’t think so!
This is precisely where the concept of investing creeps in. Consider investing in stocks because it might sound risky, but it’s probably the best way to multiply your income. There are several investment alternatives available in 2020, but you must begin somewhere.
3. Maintain Your Budget
First things first, do you have a budget created? If you haven’t created a monthly budget, you are already in deep trouble. Make it a point to create a budget where you can list how much you are earning and spending monthly. Once you know your income and expenditure, you can allot some percentage to your savings.
Once you have a budget created, work towards maintaining it every month. Yes, there will be months when you might need to spend more than necessary. But this is where your organized budget will help you tide over any crisis. This is one of the most essential methods of maintaining stability in terms of your personal finance.
4. Track Your Lifestyle Inflation
Lifestyle inflation is a real thing and if you don’t believe us, just think about why you are in the first place. The truth is that the more money you are going earns, the more you will end up spending. Thus, you need to keep your lifestyle inflation in check. Since that is precisely where most people make a mistake – the inability to understand inflation in daily lifestyle.
So, remember that this might be making you happy now, but it is also ruining your wealth in the long run. The actual analysis important to an investor is the ones made via calculating expenses and checking whether investing is even an option.
5. Understand the Difference Between Needs and Wants
Your needs and wants are two completely different things. There are so many areas in your life that you know essential needs, like the money you spend on groceries or rent or even medical care. However, other areas might appear like a need; instead, these areas are all your wants.
Want can be anything. You might want to buy a car, but buying a car might severely affect your personal finance. So, buying a car would be stupid, and you do better by simply not making such a stupid investment!
6. No-Spend Challenge
This is one of the smartest financial hacks out there. The best thing about such a challenge is that even though you are not literally not spending anything at all, you are still saving. However, it is not possible to do this challenge often, but that is precisely why it’s a hack – sue it during a crisis or towards the end of the month.
Soon, you will find out that those impulsive shopping sprees have transformed into shopping that has a purpose. The no-spend challenge is a blessing, and it always helps, especially if you are aggressively competitive and hate losing.
7. Uninstall and Unsubscribe
If you don’t uninstall all those shopping, food, and travel apps from your smartphone, there’s no way you will be able to start saving sustainably. Being sustainable means long-lasting, and saving will only come via not spending.
Thus, uninstalling your daily temptations is quite essential in the long run. Don’t forget to unsubscribe from all those mailing lists – those are temptations too!
The key to becoming rich is not spending. Yes, it might sound a little weird, but it’s true. Instead, you need to save, invest and multiply your savings. And no matter what anyone says, the moment you gain control over your personal finance, your life will automatically come under control. Thus, start saving because only then you can start investing!
Also Read: How to Optimize Your Personal Finance?
Olivia Smith is a passionate blogger. She loves to share her thoughts, ideas and experiences with the world through blogging. Olivia Smith is associated with TheBitcoinMagazine, Gossipment, TheParentsmagazine, ThePetsMagazine, TheLegalGuides, EssayWritingGuides & TheSportsMag.