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5 Financial Tips to Create the Life You Want
Money can’t buy happiness, but it can certainly buy freedom. When you make wise financial decisions you give yourself options. Those options and choices advance you toward the lifestyle you desire. Here are 5 financial tips to create the life you want.
- Budget is King
This may seem obvious, but keeping a budget is crucial to creating the life you want. It’s common practice to set up a budget by separating expenses into three general categories: essential, lifestyle and savings. It’s called the 50/30/20 rule: 50 percent of monthly income goes to essential expenses—like rent or mortgage payments. 30 percent goes to lifestyle expenses—like a gym membership or eating out. 20 percent goes to savings or investments.
People mistakenly think that budgeting means never splurging. Occasionally spending on non-essential or lifestyle items within your budget is an investment in yourself. This can boost morale and productivity. So if you keep to your budget and have a little extra, treat yourself!
- Use Free Tools
Making and sticking to a budget is easier than ever with apps like Mint. The popular free app allows you to create budgets and serves as your “accountability partner” for your financial goals. Mint, and others like it, can send you alerts when you go over budget, or an account balance gets too low, or when bills are due, or if there is unusual activity on an account.
- Maximize Your Bank Account
Is your bank account working for you? If so, and if everything is in your checking, consider opening a savings account. This is a safe place where you’re less likely to spend the money. An added benefit: In savings and other investment accounts your money earns compound interest, increasing in minimal increments. Though increases are small, by consistently adding to this account you’re building a substantial amount for a rainy day fund or retirement.
Savings accounts often require a low minimum balance of $25, but some may not require a minimum balance at all. Talk to your bank about fees and withdrawal restrictions. Use a site like Bankrate as a resource to explore your options.
- Spend Now to Save Later
People often make the mistake of buying an item simply because it’s the cheapest option. For example, you may pass on the couch you want the most for a less expensive one that will only last a year—before you end up buying another cheap couch. In the end purchasing two cheap couches is more expensive than purchasing the more expensive, quality couch you wanted in the first place.
Services like Acima Credit make it possible to have that quality couch, or whatever piece of furniture or appliance you want, today. Acima has teamed up with thousands of retailers to provide fair leasing on products. Leased items are available for purchase within 90 days for just a $10 fee. Acima’s lease-to-own system has made lifestyle improvements simple and attainable.
- How Much Is Your Time Worth?
Before making a purchase, consider how much money you make hourly. Got it? Now, how long would you have to work to pay for that item you really want? If it doesn’t seem worth it to work 20 hours for that new Xbox, don’t buy it. Asking yourself this question can curb impulse buying, fast.
The smarter you are with your money, the more the things and experiences that you really want will become available to you. Using these five tips will help you make strides toward financial freedom and independence.