Financial Peace! The ultimate desire. Isn’t it? But how to achieve it?
In this blog, we will discuss the fundamental, eminent, and most essential aspect of getting “Financial Peace.”
Let’s start it by visualizing financial freedom.
How about spending your money in whatever ways you want to spend with no stress or worry? How about achieving financial freedom in a genuine sense?
Indeed, it is soul-satisfying, but unfortunately, reaching to that extent somewhere appears to be far off; also, there is a lack of awareness about how to begin to accomplish all that.
“Either you will learn to manage money or the lack of it will always manage you.”
To achieve anything, you must first have an idea about its planning and management part. Similarly, you have to figure out how to manage money, how to do financial planning, and how to do personal financial planning for financial peace.
It just needs a bit of change as having a plan with money gives us hope and vision for the ultimate objective.
Let me tell you, “Money Management” is the ultimate secret of financial peace, and for the management part, financial planning is crucial. You always thought of limiting yourself from spending by cutting so many essential things in day to day lives or keep up a strict financial plan. Whereas the fact is a financial plan is something which allows you to spend without guilt or regret. Also, for money management, you need to know how to make money, save money, and invest it for a better outcome.
Now let’s dig into how to manage your money well as we want peace of finance, not a piece of finance right. Here I will show you a few different ways of how you can manage:
1.Begin with Budgeting
“Budgeting isn’t about limiting yourself, it’s about making the things that excite you possible.”
See, you should not spend a lot of your energy in budgeting as it will require such an extensive amount of effort and time. Instead of that, what you should do is cut the expenses that are not at all that meaningful to spend for, or get the substitute for that in less expensive ways.
If you want to buy shoes, instead of going for overrated branded shops, you can get fancy and classy looking shoes at a way less price in local brands.
Moreover, you should know and practice investment hacks by being attentive enough to invest, for instance, choosing between an expensive car that gives a similar feature that a second hand (well-conditioned) or its substitute (cheaper than the expensive one) you could opt for the second one.
Related: How To Assess Your Financial Fitness
2. Optimum use of your Job
“Choose a job you love and you will never have to work a day in your life, it is so because the only way to do great work is to love what you do.”
How about turning into your own “Boss”?
Well, this is a perfect time to make money for your own and take the optimum advantage.
For making money as per what you deserve genuinely, you have to research, scrutinize, explore and analyze your skills, experience, where you stand, and then rate yourself as per the current market scenario utilizing various websites like LinkedIn, Indeed, and so on.
Additionally, you can contact the recruitment firms; they won’t just guide you to the best according to you but also recommend you to develop and update and grow as per the current market scenario. And when you grow, earn, save, invest, and you will eventually become your own boss.
3. Say goodbye to debt, goodbye to danger
“Debt is the biggest barrier, a parasite to wealth and you can’t get out of debt while keeping the same lifestyle that got you there.”
Give farewell to your debts: credit card, education loan, home loan, car loan, mortgage loan, pay off your high-interest personal loans, etc. It is not that troublesome. You can clear it daily, monthly, quarterly, or yearly based on its type—all you need to understand how to utilize your money rightly.
For instance, some people buy luxury cars by taking a big loan amount from the bank to impress others. If it’s not that affordable in that moment of your life, it’s smarter to cut short that and utilize that money in clearing your debts. You can begin with paying off small debts first and make a sequence as per your convenience of clearing all that.
But I would say it’s not the only correct way as paying off is alright; however, you also have to save your money. For that, you can pay off high-interest rate debt first, and simultaneously you should invest your additional money into bonds, mutual funds, or in the stock market and keep some part of the money in your savings account and so on.
4. Prepare for Emergencies
“There’s always something coming in a few months that will cost money. So be prepared.”
Putting down a plan on paper and analyzing it correctly will be going very helpful regardless of crisis and challenges. To be sure, your lack of planning today can become your emergency someday. Although it’s not that difficult, it requires a little bit of focus, effort, and time.
Like in all sorts of businesses or companies nowadays, keep a specific amount of money as provisions and reserves to meet future emergencies. Likewise, we have to spare a piece of our money for the crises which are more likely to occur later on.
For instance, you may need to build an emergency fund for the repair of the house (suppose if its roof got damaged in heavy rain), medical emergencies (on the off chance someone got a heart attack or met with a mishap), technological emergencies (if any of your devices got stolen or get damaged), etc.
5. Invest Early, Often, and as Much as You Can
“Save to invest, don’t save to save only, and never depend on a single income, make an investment to create a second source.”
If you effectively want to invest, you need to discover the parity of risks, rewards, and returns, in a disciplined way. However, you can invest in anything, like stocks, real estate, bonds, mutual funds, shares or debentures, etc. Just you need to have appropriate information about investing, and the right investing strategy ought to be applied.
As I see wealthy people invest prior, and further they spend whereas, people spend first and invest the rest in general. It is up to you what strategy you want to own.
Here are some famous investment rules of Warren Buffet:
- Rule No.1: Never lose money. Rule No.2: Never Forget Rule No.1
- Price is what you pay. Value is what you get.
- In the business world, the rear-view mirror is always cleaner than the windshield.
- Do not put all eggs in one basket.
- Never test the depth of the river with both the feet.