As millions continue to brace themselves for what will continue to transpire within the economy, use this as a time to improve your finances. When times get tough, there are ways to become tougher.
Use these tough economic times as an opportunity to see where you and your family can improve your financial health in order to gain benefits now and in the future. In order to get started, consider the following finance tips that will benefit your family this year. The image source is Pexels.
1. Create a Rainy Day Fund
Rainy days will continue to present themselves. It's your job to remain prepared. One of the best ways to be prepared is with an emergency fund. Many refer to their rainy day fund as an emergency fund. The goal is to keep at least a year's worth of expenses in an account that you don't touch unless a catastrophic event happens such as a job loss or debilitating illness. Start by saving three to six months' worth of living expenses. This cushion provides a sense of stability and relief.
2. Purchase Gently Used/Pre-Owned
As more industries continue to adopt the model of a circular economy, learn to purchase items that are either gently used or pre-owned. If you're buying clothes for the family, visit the local thrift stores first. Look through online platforms such as eBay and Poshmark in order to find fashion-forward deals at great prices.
Whether you're looking for furniture, phones or hardware, look for the pre-owned options first. This applies to cars as well. Most people know that a new car loses a lot of value as soon as it's driven off of the lot. Keep a few thousand in your pocket just by choosing the pre-owned option. If you're looking for a car, do your due diligence in finding an auto loan that you can pay off in a timely fashion. When you're figuring out the best way to finance a car, pay attention to the fine print and details such as the interest rate. Calculate the numbers when you're considering expenses such as gas, oil changes and repairs.
You won't become a millionaire by saving all of your money. The best way to become a millionaire is by investing your money. Diversify your options into different investment opportunities. Invest a portion of your money into the stock market. Invest in the foreign exchange market. There are countless opportunities to invest in real estate.
Whether you choose to rent or flip houses, real estate is an excellent opportunity to consider. Invest in businesses as a silent partner. Do your research on the best investment opportunities to take advantage of. As you do this, educate yourself on each one. Take reputable courses, read books and surround yourself with mentors and people who are on the same path. As you learn and apply your knowledge, you can also exchange notes, ask questions and increase your capacity to invest.
4. Tighten the Budget
Take a look at your budget. Comb through every line item to see where you're frivolously spending. For some people, it's not a matter of spending less. For some, it's just important to focus on ways to make more money. However, if you and your family constantly swipe the credit cards without a second glance, it's time to buckle down and get serious about how much you're spending.
Eating at restaurants can get really expensive because those costs add up quickly. Instead of buying takeout, make food at home. Yes, it takes a little more time. However, you'll save so much more money. Learn how to do your manicures at home in order to save money. Put the money you save into your Roth IRA account. This doesn't mean you can't spend it at all. This just means that you can take a closer look at how you can save more money by eliminating certain expenses. This is a temporary fix for this year. When you have more financial wiggle room, you can go back to enjoying your luxuries more often.
While it's important to be aware of what's happening within the economy, don't consume yourself with a constant news cycle of doom and gloom. Instead, increase your financial literacy through book consumption, classes and mentors. Find ways to leverage all you have in order to gain more. As you focus on ways to build wealth and improve your finances, you'll see a shift in the way your finances operate now and in the future.