Personal growth and productivity coaches always encourage people to write things down. They argue that it is a powerful exercise, one which helps an individual to take control of their life and achieve more. The power of writing also applies in financial life, it can help greatly in sticking to your goals and ultimately achieving them.
Writing plans and retirement
There is a strong correlation between writing down goals and achieving them. People who make retirement plans and jot them down are twice as a likely to increase their contribution. They are also highly likely to stick to their saving goals and plans.
It is unfortunate that the culture of writing down retirement plans is not well entrenched in the society, something experts attribute to the low retirement saving culture. A lot of people have saving plans, but very few have actually written them down. This leads to the question of whether it can really be called a plan when its not in written form.
Experts are of the opinion that it qualifies to be called a plan but it is not as powerful. Writing down makes something seem real, people get to understand how goals should be reached. This is in agreement to a survey that was carried some years ago by Wells Fargo. The study found that people with written retirement plans were more secure and succeeded in reaching their financial goals. Written plans helped people get a clear understanding of what needed to be done to reach their goals.
Getting down to work
People may find this task taxing but when started simple without postponement it can be achieved sooner than imagined. When doing this an individual should focus on three things: income, budget and long-term saving goals. Regardless of how simple the plan is , the focus would be getting started, it is allowed to have as many mistakes as possible. This is acceptable since adjustments can be done later. You should not be afraid to start the plan on the premise that you do not have the required information.
This gets built up as the days go by. Experts say that until you get something written down, you will not really know what you are aiming at. So, when you start writing down, regardless of how sketchy, you have kicked off a journey that will see you have a happy retirement. You can also get professionals to help you but, do not approach them unless you have started the process yourself. This is one of the keys to retiring rich. Own initiative, setting goals, writing them down, perfecting the plan and sticking to the details.
- The Key to Retiring Rich
- December 6, 2017
Saving is important but it shouldn’t be done at the expense of some items, in fact, these expenses should be on the list at all times regardless of how cash strapped you are. Here are four things that you should never skimp on:
Two thirds of all bankruptcies are due to medical bills. The worst thing about medical bills is that they can stretch to huge amounts, leaving us in a very bad financial situation. However, hospital bills can be taken care of by health insurance; you may experience the worst as far as our health is concerned but end up paying nothing out of your pocket. This is because health insurance could take care of everything. This stresses the need for giving health insurance high priority, making sure you never skimp on it, for whatever reason.
Although you may have some form of vehicle insurance, you may not be fully covered. Look into buying coverage that will offer you full protection when a misfortune happens. Failure to do this may lead to serious financial implications when you’re required to pay for some of the losses out of your pocket.
Insurance it is such an important component in our lives. It protects us from situations which would have left us in very bad shape. Homeowner’s insurance covers us when we experience some catastrophes such as fires, hurricane destruction, earthquakes, burglaries and other disasters which you cannot prevent. Make sure that your premiums are always up to date, this will save you a great deal in case of misfortune.
At no time should you fail to allocate money towards settling your debts. By doing this you are not only reducing the amount owed but also improving our credit rating. Failure to pay your debts puts you in a precarious situation, the amount owed continues to increase due to high interest and your credit rating deteriorates putting your future credit borrowing endeavors in jeopardy.
These are some of the things that should be given prominence when it comes to your monthly budget. Honor them religiously and you could save yourself a lot of financial strife.
- 4 Important expenses that you should never skimp on
- November 29, 2017
There are some things we do that become wasteful habits; they keep our expenses unnecessarily high. If we stop these habits, we could save ourselves a lot of money and use it to invest or put it aside for future use. Here are five things that you may be unnecessarily wasting your money on:
Buying brand names
Sometimes we insist on buying particular brands arguing that they are good quality or they represent the mark of quality. While this may be true for some products, some generic brands have the same quality level as designer brands. For example an designer brand product will sell at a high prices but will offer the same quality as a generic at a much lower cost. So the next time you’re shopping consider buying generic products especially when you have established that the levels of quality are similar.
Hiring people who offer services that you can do on your own
At times we hire people to perform tasks which we could do on our own. For example, simple car repairs that would only take a few minutes of our time and cost nothing but if we hire someone we end up paying high costs of labour. You could save some money if you did it yourself, only seek assistance if the problem is a complex one.
With the information flowing left, right and center, there is no reason why you cannot perform some simple fixes on your car or home. It will save you a lot of money and at the same time help you learn some of these skills so that when you are in an emergency situation you do not have to wait until help comes.
Shopping when you are hungry or have a lot of time
You could make a serious mistake when you go shopping in a grocery store when you are hungry or have a lot of time to spend. Avoid this at all costs and you won’t end up buying something when actually you don’t need it.
Making a habit of buying snacks at the gas station
You may have made it a habit to buy snacks every time you’re at the gas station. You’ll find that most of the things that you buy are not necessary; you can do without them or could have carried them from home. You end up spending a lot of money on things without even noticing. Avoid it and you could save yourself a great amount.
Taking expiry dates as law
We always assume that expiry date for products are on the exact date but this is not the case, the manufacturer gives an allowance. So you may buy a product which is on offer but be near its expiry date and still not experience problems after consumption.
If you stop these and many more unnecessarily habits, you could discover that you have been wasting a lot of money.
- 5 things that you waste your money on unnecessarily
- November 23, 2017
Being frugal is more easily said than done, but there is a way you can lead a frugal life until it becomes the new normal. So how do you do it? It may take some sacrifices, but if you stay focused and keep your eyes on the prize, it can be done.
Start with what you eat. Too often you find yourself eating out, and to make matters worse, you may opt for fast food. This is not only damaging your finances but also your health. Make a concerted choice to stop the habit. Decide that from now on you’ll be eating at home and only eat out rarely, on special occasions. This may be tough, but once you get used to it, you’ll see the benefits flowing.
Eating at home has its advantages; you eat healthy and above all, save money. Eating out on the other hand, involves paying for both the food and the service you receive. When you eat junk food, you risk health complications in later life. To make eating at home simple, buy and prepare your meals in bulk. Purchase all the food you will need for the week and prepare large portions so you have left overs for the next few days. It’s as easy as freezing and reheating!
Food preparation takes patience, something that many of those who eat out don’t have. When you get used to the process, you’ll also be learning how to be patient, an attribute that comes in handy in life. It won’t only be a food preparation process, it’s a learning process, where skills and attributes which can help you manage your finances as well as other aspects of life can be gained.
Another way you can become more frugal is paying attention to what you wear. You’ll find that at times you end up buying clothes that you don’t even need. We buy clothes in the name of fashion only to discard them after a few months. Being frugal involves buying clothes that will last. It’s all about being presentable and comfortable rather than trendy and fashionable. Some may call it conservative, but you’ll be creating a class of your own. It may be termed traditional but you’ll have saved more and you’ll have enough clothes to wear. For those who choose to spend, loads of clothes will be filling their closet but their accounts will be dry.
It is possible to train yourself to be frugal, but it requires discipline, dedication and patience. At the end of it all you will see a significant change in your finances.
- How you can easily train yourself to be frugal
- September 26, 2017
There will be things in life that you wish you had learned earlier, particularly how to handle your personal finances. If you had known about them earlier on in life, you could have done things different and perhaps some of the financial problems that haunt you today could have been avoided. Here are four tips that are important to know as early as possible.
Start saving earlier
There are many times in life that you will need to spend large amounts of money, either for an emergency or to invest. Savings will be very important during these times as you will be able to afford these inevitable costs without struggling financially or landing yourself in huge amounts of debt. Starting a saving plan as early as your first pay cheque will not only help you to form a savings habit but will also ensure that you always have some cash available when you run into financial emergencies.
You need to start setting aside a percentage of your earnings every month; experts recommend at least ten percent. Within a short time, you’ll have enough money to have a solid emergency fund or invest some money. If you did this when you started earning, you should have enough, not only for investments but also to allow you retire comfortably.
Take advantage of unexpected cash
Sometimes in your life, you will get unexpected cash in form of gifts, bonuses, dividends and more. In most cases, this money ends up being used in to treat yourself, buy luxurious products, some of which you may not need. If you use this cash to acquire something of value, you won’t regret it later. A good idea is to use it to pay off high interest debt, doing this will save you money in the long run.
You could also use it to buy an asset of value. Unexpected cash will only come once in a blue moon, so do not waste it on luxurious items. Invest it in shares, pay off that stubborn debt and you will have made a positive difference to your finances. This is a lesson that many people wish they had known, they regret having blown a chance to make a difference in their lives.
Budgeting and sticking to it
Budgeting is not effective unless you do it right. Many people buy based on their instincts and later, find they have spent more than they wished to. If you start making a budget the first time you earn a pay cheque and continue with this habit, you’ll avoid impulse buying and other habits which put you into financial trouble. Learning to budget and sticking to the plan from the onset makes you financially disciplined, it will save you money, which can be put to good use.
It isn’t too late! Follow these tips and you will see a difference in your finances.
- Money tips you’ll wish you had learnt earlier
- September 12, 2017
We all know what an excellent credit score means; it guarantees us regular credit and cheaper loans among other benefits. To some it’s quite elusive but really it is quite easy to acquire an excellent credit rating. Here are five steps that can help you achieve it.
Timely payment of your bills
Late payment of bills not only attracts penalties but also has a negative effect on your credit score. If you pay your bills when they are due, you’ll not only be reducing your debts but also improving your credit rating. To make sure you pay bills on time, make a list of all your bills and include the dates they are due. Keep this list in a conspicuous place and ensure you visit it every week. This will ensure that you’re in tune with your bills and none will fall behind schedule.
Lower your credit utilisation ratio
Credit utilisation ratio affects your score, if it’s too high it starts to suffer. Your credit utilisation ratio can be lowered by adjusting your spending. Ensure that you don’t use all the available credit. Also ask your company to increase the limit but keep your use within the limits. This will automatically reduce your utilisation ratio.
Living within your means
Living beyond your means is a sure way to get into debt, most of which you may have some difficulties paying. If you only buy what you can afford to pay, you’ll be in good books with your financiers. Avoid borrowing money to buy something which you can do without. Make sure you have enough to save for investment as well as for emergencies, with such sound financial plans; you’ll have limited your credit card use, reducing the chances of being blacklisted by your creditors.
Monitor your score
You’ll need to monitor your credit score on a regular basis. Find out where it stands, if you discover some mistakes that can lower it, correct them as soon as possible.
Stick with old cards
The longer you have held the card and maintained regular payments the higher the chances of getting a good credit score. It pays to hang on your old cards; you stand a better chance than a person who has recent cards, especially from multiple companies.
Work on improving your credit score, with these tips, you’ll be headed in the right direction paving the way for guaranteed and cheaper credit.
- 5 steps to getting an excellent credit score
- August 22, 2017
People are always looking for ways to save money on household spending. These saving ideas go a long way in buying essential goods or setting aside for an investment. Here are six ways through which you can save on household spending throughout the year.
Turn down the heating
Winter may be cold and heating is necessary to keep the house warm, however you don’t have to turn your thermostat up high in order to stay comfortable. You can turn it down to a warm temperature, and reduce the heat by a few degrees. Turning it down by one degree leads to energy savings of up to three percent by turning down the heat.
Setting the thermostat low will not affect you during the winter, you’ll still get the warmth that you need and also save some money. The same should be done during the summer in order to save on the amount of energy used on cooling. Doing this year ‘round will ensure that you save a substantial amount to meet your needs.
Using alternative heating and cooling sources
Energy costs have been rising; electricity charges are at an all-time high, fuel prices are also moving upwards. Using alternative sources of energy will not only help you save on energy bills but also help keep the environment clean. You can keep yourself warm during winter by turning on the heater for a few hours and then turning it off.
Keep yourself warm through grabbing a sweater and drinking hot drinks. Also reversing the direction of the fans can help blow warm air down and up in respective seasons. This will keep the house warm or cool depending on the season.
Maintain your house
Make sure you carry out regular maintenance of your house; this will ensure that the system is working right. An efficient system will consume less energy, which will help you to cut your heating and cooling costs.
Unplug appliances when not in use
When you’re not using electric or electronic appliances makes sure they are unplugged. This will ensure that electricity is not consumed saving on energy costs.
Use water sparingly
Conserving water can help lower the utility bills, do this every day and you will be surprised by how much you have saved in one year.
Use natural lighting when it allows
Open the curtains wide during the day and turn off the lights. Use natural light in your home as often as possible. Eight hours of sunlight means great savings on lighting costs.
With these and many more saving tips, you’ll have saved a lot of money in one year. Embrace them and you’ll see the difference.
- 6 easy ways to save on household costs all year ‘round
- August 8, 2017
You may find yourself in a situation where you don’t have money to finance your basic expenses, even after receiving what most would consider a good pay. This is mostly attributed to lifestyle habits which you have adopted over time. Here is a list of lifestyle habits which, if dropped, can see you achieve financial stability.
Eating fast food joints or eating out instead of packing your own lunch and snacks from home: This is one activity that can see you spending 10 to 15 dollars on every snack or meal. When you add this up, it totals between 300 to 450 dollars on one single item over a month. If you formed the habit of packing lunch and snacks at home, this is the amount you would be saving per month.
One might argue that it’s a small amount given the inconveniences that will come with food preparation but when you account for the time you spend eating out in addition to the cost of food you’ll realise that the figure is high. It’s an amount that can make a considerable difference to your financial situation.
Then there’s the habit of picking up something that comes your away, succumbing to pressure from sales attempts and buying an item which you might not even need. This eats up a huge amount of your budget. It will create a huge hole in your budget and you may resort to using credit cards, something that could have been avoided, if only you stuck to your budget.
If you’re someone who easily feels pressured to keep up with trends, this could be the reason why you have run out money a few days after payday. Keeping up with friends or peer pressure may, at times, not be a bad thing as you’re motivated to work hard but when it leads you to spending on things which may not be important, it’s a real problem which needs to be looked into.
Buy only what you actually need, something that will last a long time and give you value for your money. You may soon find yourself deep in debt and your financial situation will have worsened. Dropping these spending habits will help you achieve financial freedom.
- Lifestyle habits you can adopt to save more money
- July 18, 2017
We are living in a time when we are influenced to spend. We have developed a YOLO (You Only Live Once) mentality; something that is influencing us to spend everything we earn, living beyond our means and putting ourselves in serious financial problems. Here are some of the red flags that you are living beyond means:
Are you being overwhelmed by the fear of missing out (FOMO)?
Fomo is an acronym that has gained prominences, the fear of missing out on things that your friends are doing. If this fear is dictating how you spend then you’re at risk of living beyond your means. It can be that innocent “let’s eat out” statement from your colleagues. Knowing the kind of fun that they will have can make you feel pressured to join them even when you know that you have bills to settle. You’ll end up spending more than you had planned.
While you don’t need to give up every social activity, you’ll need to weigh some of your spending. Find cheaper ways to have fun. Attending social events which will lead you to spend heavily may only lead to disappointment when you realise that it has left some dents in your pocket.
Are you carrying over a balance in your credit card?
If you find yourself carrying credit over from month to month then you’re spending more than you’re earning. This is a red flag which needs to be addressed quickly before it gets out of hand. This can be done by tracking your credit card use, and prioritising previous balances. Never use your credit card until you have ensured that the balances have been cleared. The temptations that come with cards need to be avoided, otherwise the problem will persist.
You’re not saving regularly
You should be saving at least ten percent of your earnings every month. If you find that you’re spending all your earnings with nothing to save, it means you are living beyond your means. You should set aside some money for future use, this can be done through setting goals and ensuring that you save before spending.
- 3 signs that you are living beyond your means
- July 4, 2017
With life becoming expensive, people are bracing for hard times. News of a new family member may be welcome with jubilation, but after the merrymaking, the hard part begins- raising a new baby. If you prepared early enough for the arrival of a new member, you may not be affected. However we are not always prepared! Here is how you can prepare financially for the coming of the bundle of joy:
Updating your budget
You will definitely need to accommodate the new family member. He or she has needs too and they need to be met. Raising a new child to the age of eighteen, according to recent national estimates, costs an average of $ 280,000. That means you may need close to a quarter of a million dollars.
This estimate is only based on the basic items, it may have left out several other requirements which are difficult to estimate. You need to review your budget to accommodate the new family member’s needs. Your income may not have increased, so you have two options: change jobs, or start a new business/side venture to adjust your current expenses.
Perhaps the most prudent thing to do is to cut on expenses and acquire some savings which can be used for the additional member’s needs. You can cut down on non-essential spending, such as travel and entertainment. You can also cut down on luxurious goods. Stick to the basic needs, while saving the amount left over from such budget adjustments.
Setting financial priorities
You will need to determine your financial priorities. Ensure that what you spend your income on reflects your priorities. You may have thought of building a bigger house or buying a new car, but now you have a new member who needs to be catered for, perhaps planning how you can start saving for his or her future should be your priority. Taking out an insurance policy which can cater for his or her future will save you a lot.
Welcoming a new member will need some adjustments in order to ensure that he or she enjoys the kind of life that you would have wanted.
- How to financially prepare for a new family member
- June 20, 2017