We all walk a fine line with our finances. We don’t want to spend our time doing nothing, we want to enjoy ourselves and experience life’s little luxuries from trips away to fun purchases. If you constantly favor saving over spending, you’re going to have a pretty boring life. At the same time, though, we have to prepare for tomorrow. We need to think about making sure that we are going to be financially secure ten days, ten months, or even ten years from now.
It seems that we are under constant pressure to plan for tomorrow. Just look at the housing market. As soon as you hit your twenties, there will be people around you, telling you to buy a home. A home gives you some form of financial security sure, but it also ties down your finances. Now, for years, you’ll need to fit in mortgage repayments into your budget. These can be incredibly expensive and will make paying for those luxuries that you love just that little bit harder. As such, it might be wise to not buy a home until you have the income where you can easily cover this cost and still live a full life. Or, simply prepare to accept the fact that, at least for a short time, you won’t be able to afford those fancy trips or that new car. You can learn more about whether you can afford to buy property on www.cnbc.com.
The lesson here, is that it’s a balancing act. It’s about balancing what you need with what you want. It’s about balancing what you must spend with what you’d love to purchase. It’s about planning for the future while still enjoying the present so that one day you’ll be able to look back at the past with no regrets. So, let’s explore some of the ways you can do this, and we can start by thinking about budgeting:
How Should You Budget?
Budgeting is actually easier than a lot of people realize. You need to start by working out exactly what you make per month. This is the total amount you have to play with, and it should include all of your incomes. So, if you have a side hustle, make sure that this is counted. Unless you would rather see that as extra money.
Then, subtract all of the costs that you are aware of. This includes bills, rent, mortgage repayments as well as an average food cost. So, you might budget fifty a week or more for food. Now, the amount you have left should be halved. Half of this must go into savings. Set yourself a goal to save each month and put this as a direct debit on your account. Just like a tax, it will leave your account at the end of each month. This cuts out the choice of hanging onto it and spending it. Congratulations, you’ve just made a smart choice on how to prepare for your future.
The other money you can spend however you like. Put it towards your holiday, use it for presents or nights out. It’s your choice, but you have to remember that this is all you have to spend. Now immediately, you might notice a problem. There isn’t actually that much to spend is there?
Play With The Numbers:
This is where you need to start cutting costs on things that you need so you can afford things you want. An example of this would be something like energy bills. We all have to pay energy bills, but they should be more manageable if you can go a little more green. Make changes to your home to save energy, and you’ll have a little extra to spend each month. It won’t be much, but it will make a difference. Since you have already set a target, add that to your spending budget for now.
You can also think about boosting your income. What you’re looking for here is a passive income. There’s no point in taking on a second income to enjoy your spare time if you’re going to end up with no time to spare. There are various options for passive incomes from the stock market to property. Research a few and find out which one will benefit you and suit you the most. If you’re good with numbers, you might want to consider forex trading, which is basically investing in the value of different currencies. By predicting patterns, you can make a fortune in this market without even trying.
Preparing For Disaster:
Of course, your budget is based on your income. Any hit to your income will kill both your spending budget and your savings. Worse still, it might mean that you have to use your savings to cover expenses that you can no longer afford. You can see how this would be an issue. Suddenly, you don’t have any money in your account for the future. This is where great budgeting advice that is found on www.lifehacker.com comes in handy. But how do you handle this situation?
You have to prepare for any disaster that can be foreseen. You’re probably thinking, wait a minute – unexpected costs can’t be foreseen. That’s why they’re unexpected. It’s not true. You might not expect to develop a disability, but you can forsee that it’s a possibility so you should plan for it. Anyone could develop a disability. You might be involved in a car accident, you could fall at work, or it may even develop due to biological causes. Since it could happen, you should plan for it. According to www.insurestat.com, doctors should definitely do this because anyone working in the medical field who develops a disability will probably be unable to work. As such, they should protect their income. You can protect your income with disability insurance and guarantee that you are always on roughly the same level of pay. Regardless of whether you can work or not.
This isn’t the only disaster you need to prepare for. You have to consider the worst-case scenarios that could impact your finances. Medical bills, for instance, are one of the greatest causes of debt in the USA today. You can plan for this by buying into the right health coverage plan that provides everything you might need.
Don’t Always Wait For Tomorrow:
Tomorrow doesn’t always come. Or rather, you can miss too many tomorrow’s and before you know it you’ve run out of time to do what you want. This may sound morbid, but you could die tomorrow. So, you might constantly be putting off that holiday to a point where you can easily afford it and when you’ll still have savings. But what if that day never comes? Most people do live their lives on an average, basic income. They never reach that 100K a year paycheck, and yes you can wait until retirement and use your 401K. But, after you’ve retired, you might not have the energy or the health to do everything you wanted. Don’t let life pass you by while you wait around for the right moment to do something.
Live For What You Love:
Finally, you need to make sure that you’re not spending your hard earned money on things that you don’t want and that you don’t need. This happens all of the time. We’ve already mentioned one example, and that’s property. Buying a home can be right for some people. But, if you are still moving around and haven’t settled, it’s just a waste of money and adds plenty of stress to your life that you don’t need. Instead, you should continue to rent. While it might be dead money, it can be far cheaper than purchasing a home that you may never pay off.
Ultimately, you have to live your life in a way that makes sense for you and financial purchases should be part of that decision. Some people spend their whole life traveling around the world, work by freelancing, and never once think about settling down into a comfortable routine. This site, www.justonewayticket.com, has some great advice on spending your life traveling. Could this be the lifestyle of your dreams? Perhaps! And as long as you have a plan for tomorrow, you can live however you want to today.
Featured Image By: Maxpixel