Money isn’t the most important thing in life, but it affects EVERY important thing in life. To make sure your money only affects your life in a positive way, keep these three timeless pieces of financial advice in mind.
#1: Saving Should Be Your Second Priority.
Yes, saving money is an important part of wealth building. But it’s not the MOST important part. Here’s the fact: If you’re not earning enough to meet your basic needs AND ensure a comfortable retirement for yourself, then saving money won’t fix the problem.
Saving and budgeting will help you stay afloat and live comfortably for the moment. But if you’d like to truly rise from poverty and live with the peace of mind that your retirement years will be well-funded, you’ll need to spend more time and effort on your FIRST priority.
#2: Investing Should Be Your First.
That’s right – investing. And primarily, I’m not talking about investing in stocks, bonds, business, gold, real estate, and so on, even though they ARE good investment vehicles. What I mean when I say “investing” is, first and foremost, to invest in YOURSELF.
Investing in yourself mainly means finding ways to grow your income. It’s the only way to truly reach your financial goals. And there are many simple, inexpensive ways to invest in yourself, no matter where you are in life right now.
If you’re an employee, then you can invest in yourself by learning new skills and taking more responsibility. You’ll climb up the corporate ladder and get a commensurate increase in pay.
You can also start a side business – preferably generating income that will one day outgrow your day job salary. Our advice: Go for a home-based business where most of the work has already been done for you, such as network marketing.
And of course, you should also put your money in investment vehicles that grow faster than the inflation rate. But remember – you can only do this when your income has grown enough to meet your basic needs and more. So focus your efforts on getting there first.
#3: Cut Costs
Aside from saving and investing, the third leg of the stool comes in reducing your expenses. First and foremost, I advise you to stop spending money on “stuff” – be they clothes, video games, movies, toys, and other purchases that don’t really contribute to building your wealth. If you absolutely must buy something, at least research it online to find coupons, like Bloomingdales discount codes.
Here’s a handy tip to keep in mind: Whenever you’re thinking of buying something small, ask yourself if you can afford to pay double its price. If the answer is “no,” then don’t buy it – it will probably hurt you in the long run.
Of course, this tip won’t apply to bigger purchases, like a house or a car. But when it comes to “stuff,” it’s a great way to save hundreds, if not thousands, of dollars each year – money you can invest in yourself, instead. For bigger purchases, like a house or a car, you can save money by improving your credit score and lowering your interest rate and monthly payment.
So to recap: (1) Invest in yourself and grow your income, (2) Save and budget your income well, and (3) Cut costs. Make these three principles an integral part of your lifestyle, and your financial success will no longer be a matter of “if,” but “when”.