Imagine a 20 something just starting their work life after finishing college education. He/she would have loads of student loan to repay, a successful career to start, tons of financial decisions to make and lots of dreams to live for. Well, everything would become smooth and easy if they follow the below guidelines.
Remember how you achieved the academic success? I am sure it’ was due to your intellectualism and hard work. Guess what? Financial success can be achieved by exactly those two qualities you possess. Having success is a mind game, a game you play against yourself.
Below I’ll give you some tips which you can mold to make suitable to your taste.
My job is to put the tips in writing, your job is to memorize and follow till they become your habit. You’re intelligent enough to know how to convert a good practice in to a habit.
11 quick tips to brighten your financial life
Remember, these are broad tips, you need to figure exact steps out
1) Get rid of all debt – This must be student loan, get rid of it as soon as possible. Pour every money you save in to repaying debt.
2) Don’t accumulate further debt – Don’t buy a house until your existing debt is paid off. Pay off your credit card balance before they are due. Car loans are avoidable and cars are depreciating assets. Don’t put unnecessary money into buying a car.
3) Buy what you can afford – I mean buy things you can pay off from your savings. Be it your car, clothes, shoes or gifts. People who love you won’t mind your decision, if explained properly. Anything that requires installment payment should be avoided.
4) (Spending = Earning – Saving ) – Spend the money that you didn’t save (rather than saving the money you didn’t spend). In other words, save a portion of your earnings first and set them aside to another account. Spend rest of the money the way you want.
5) Be a better employee – Work your heart out; Be a valuable employee. Make work impossible without your contribution and presence. Your compensation will skyrocket. Earning more will let you save and spend more. Switch jobs for better prospect and raise.
6) Marry like minded partner – Last but perhaps most important. If you don’t take care of this point, all previous ones would be impossible to keep up. A like minded partner will encourage you in your good financial practices.
7) Don’t play a bank – Don’t lend money to others, your friends, cousins. They destroy relationships. They make you lose money as often you don’t get back the money. Don’t ask for money as well.
8) Don’t gamble – Gambling includes stock trading, commodity trading or any other kind of trading as well. Almost always, in all practicality, ordinary people lose money in stock market. Go for long-term stock investment instead.
9) Don’t keep up with Joneses – If your friend show off his new car, ask him if it was paid for. If not, you are better than him. True rich people never showoff their wealth. (well, barring a few of course). Your neighbor is never richer than you unless you access their bank balance.
10) Get rich One Cent at a Time – There’s no get rich quick magic, unless you win a lottery or you are Mark Zuckerberg. You become rich slowly with every penny you save and invest.
11) Go over finance regularly – be happy seeing your debt go down and savings go up. Very essential to keep you motivated! I suggest once a month, at least.
Let us know your feedback, likes, dislikes from the tips above. We will again come back with another set of tips soon. Cheers to your success!!
Paul @ The Frugal Toad says
I like the “buy only what you can afford”advice! Very simple concept but very difficult for many people to do consistently. That is why developing a realistic budget is so important!
That’s true, but when budget doesn’t work, like for people like me, then one option will be to set aside money for retirement and financial goals before even touching the residual.
This is really good advice. So many people start getting into financial trouble when they finish college and think they need to upgrade their lifestyle. When we were newlyweds just out of school we said we wanted to keep living like we were in college. Avoiding further debt and aiming to get rid of student loans ASAP can help avoid so much financial heartache. The idea of buying a new car on a starting salary with lots of school loans is considered normal–but it’s crazy!
I know few who went after a new car and still paying a huge balance on their student loan, coupled with a hefty car payment. They barely save any money. On the other hand people like you are aggressively saving for their retirement.
The first category will have to work in their 70’s even while the second category can think of taking an early retirement, once they have enough saved.
I think the biggest challenge in today’s life is how quick one can get rid of financial debt. People tend to buy everything on credit and this gradually make life too stressful.
Yes it’s the problem with society and more people are applying for credit these days. When we learn to live below our means only then we should start using debt. I tend to keep mortgage away as a home is a appreciating asset. Spending money on credit cards, etc are strictly no no for me.
International Journal of Research says
Very wise suggestion and simple to follow.
Glad you liked it!