Writing about personal finance and investing for 14 days has been an opener for me. I learned more about the subjects by writing. I got to know what I know and what I didn’t.
So here is a recap:
Want to be financially comfortable?
Do these three things:
- Invest & Pay off your debts
Most rules are simple, and simple doesn’t mean easy.
To Budget: Track all your expenses and income for 30 days. Differentiate between your needs and wants. Write them down. Choose expenses that aren’t important and reduce spending on them. The leftover you save.
To save: Open an account which you won’t have to dip into during emergency and pays any form of return higher than inflation. Keep contributing there for 90 days, then take it out and invest.
To Invest: Choose what your financial goals are and use your time horizon to choose the asset you should invest in. Allow your investments to mature to reap significant returns.
To Pay off Debt: Choose either snowball method or avalanche method. Write down all your debts with their corresponding interest rates and work out a plan which should be included in your budget on how to pay them off.
Different strokes for different folks
After all is said and done, there are habits you should cultivate to have a smooth financial transition.
- Focus on increasing your income.
- Invest and save consistently
- Do not try to keep up with the Joneses
- Always live below your means