If you want to get ahead financially but don’t quite know how to do that, you’re not alone. Lots of folks always seem to be behind but want so badly to get ahead. The reason you may feel like you’re always one step behind financially is that you have forgotten the basics.
If you’re not practicing financial basics, you will keep struggling and never get ahead. Maybe you just need to brush up. Let’s go back to basics.
The Financial Basics
Need It or Want It
- Need is quite different from want.
- You need a coat, you want a high fashion, high-priced coat.
- Before you buy it, make sure you need it.
- It’s so easy to justify to ourselves that we need everything we buy.
- But we don’t need everything we buy, we may want it, but that’s different from needing it.
- Understand your needs and your wants.
- Cut out your use of credit cards.
- Credit cards make it easy to forget how much we’ve spent.
- Credit cards can make you feel like you’re not spending money…until you get the credit card bill…oops, you spent more than you thought.
- Keep a budget to track what you spend.
- Live below your means.
- A budget is a snapshot at a point in time.
- A budget will show you in black and white exactly where your money is going every month.
- Don’t cheat on budgeting, otherwise you will not get an accurate snapshot of where your money is going.
- What’s the point of taking the time to prepare and follow a budget if you are not going to be accurate.
Pay Yourself First
- Before you pay your bills, invest in your retirement plan.
- If you pay your bills first and invest second, you often times run out of money.
- Set up your retirement plan contributions to be automatic; that way you won’t even miss that money.
- Automatic investing means that you never have the chance to touch the money before it’s invested.
- Your money will grow over time.
- You just have to make sure you choose investments that are growing.
- Growth can even be a little increase in the value of your accounts.
- Growth doesn’t always have to be huge to be worthwhile to you.
- Sometimes we think that if our investment accounts aren’t growing by leaps and bounds, we’re not getting ahead…that’s not true.
- Your investments are like a good wine, they take time.
- No one knows everything, and neither do you, and that’s okay.
- If you are unsure about where to put your investment money, get help.
- If you don’t know how to get started, seek out investment advice.
- There is a lot of investment advice available to you, you just have to know where to find it.
- You can go online to investment websites.
- A lot of mutual fund companies have informational websites.
- You can get investment tidbits from financial advisers on radio talk shows.
- You can even call into the talk shows for personal investment advice.
- If you are a bit timid when someone talks about investments, take an investment class.
- Learn the financial basics.
- Don’t delay, start investing as soon as you can.
- Time is money, you’ve heard it, but do you believe it?
- The earlier you start investing, the more your money will make money for you.
- Yes, your money will make money for you.
- Compounding makes your money grow.
- The concept of compounding is that the interest you earn gets added to your principal and then that total gets interest added to it, and that process continues until you take the money out.
- The earlier you start, the less money you will need to invest due to the value of compounding.
- If your money is growing by leaps and bounds, you’ll have to invest less to achieve your financial goals.
It’s okay to make mistakes, just learn from them. It’s okay to not know everything about investing, just don’t stay in the dark. You can do it. You can get ahead financially with a little focus on your part in learning the basics.