How you fare financially is a result of a range of factors, from how you saw your parents handle money to what habits you picked up as an adult. Here are six finance tips everyone should be aware of:
1. It All Starts with Cash Flow
Yes, there are those who have invested their way into being millionaires even while only collecting a modest salary. However, in your financial life, money is the starting point. The more you can make, the easier your finances will be. From attending college to preparing for a well-paying career, to finding ways to generate passive income, your cash inflow is the foundation of the rest of your financial life.
2. The Value of a Budget
Many people aren’t aware of where their money goes each month. Just how much are you spending on vanilla lattes each month? Keeping track of your expenses and then creating a budget is one of the most valuable things anyone can do for their financial health. Make a plan, be disciplined and stick to it.
3. Don’t Be So Materialistic
While the spending of money by consumers keeps our economy going, do you really need that 10th emoji pillow? Dial back on spending your money on so much “stuff” and be more selective about what you buy. Studies have shown that paying for experiences shared with others brings more satisfaction than buying material items anyway, so keep that in mind when making spending decisions.
4. Manage Your Credit Score
A high credit score allows you to access credit for life-changing things like buying a home or financing a new business. Keeping one’s credit score healthy is accomplished by making payments on time, paying down debt, and correcting any errors or fraud on your credit report as soon as possible.
5. Divorce is Expensive
Getting divorced is often emotionally and financially draining. One study shows that divorce reduces each party’s wealth by a stunning 77%. Before getting married, do a gut check and make sure you’re both ready. If issues come up, seek counseling and make an effort instead of immediately calling it quits.
6. Enjoy the Present, but Plan for the Future
Nothing lasts forever, including your ability to work. Have financial measures in place so that you’ll be secure when it’s time to retire.
No matter what your age, it’s never too late to cultivate good money habits. Use these six financial tips for a more prosperous financial life.
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