Let’s admit it, there is nothing better than being debt-free. In 2016 alone, the total household debt of Australians stood at $2 trillion. The average Australian household owes about $250,000. Not only is that mind-boggling, but also shows the unhealthy financial lifestyle of many people.
Having outstanding is not a bad thing if it is a loan for a business or a mortgage to buy the family house. The problem is that most people get into debt to finance unsustainable lifestyles. A healthy financial lifestyle is where your expenses don’t exceed your income, and you are debt-free.
It seems impossible for a lot of people to have that kind of life, but it is possible. Just follow these simple steps.
Open a Savings Account, Use Direct Deposit
Having a savings account is one of the ways one can develop a savings culture. If you have one, good for you. If you don’t, open one with great interest rates. The reason for opening a savings account is to save money. The best way to do this is a direct deduction from your salary.
Saving is one way one can steadily grow wealth, agree on a figure with your employer, say $20 to be deducted from your paycheck before you get it. That amount goes directly into your savings account; it helps you save for a rainy day and reduces spending on unnecessary expenses.
Stop Using Credit Cards
Extreme right? Credit cards are one of the surest ways to get into debt there are. A lot of people find it difficult to pay their monthly card charges. The biggest tip of having a healthy financial life is living within your means. Nothing works against that principle better than credit cards.
Get a budget for your monthly income, and work within the budget. If you need something, save to get it. Get rid of credit card debt.
Lower Your Monthly Bills
We usually spend our money on things we don’t need, such as premium cable subscriptions, unlimited data, text packages for our phones, and several other variable expenses. While you might not reduce your fixed costs like mortgage, your car loan payments, you can reduce your recurrent expenditure.
Reduce your electricity consumption, the frequency of restaurant dinners, and other inessential expenses. Frugality is critical; think of exciting ways of enjoying life without spending too much.
It is essential and more sustainable to reduce monthly costs gradually; that way, you can go at your pace and have the satisfaction of improving on the past milestone. Check your monthly expenses, be honest with yourself, mark out your essential expenses. The ones you deem nonessential cut them out or reduce.
Find Your Biggest Nonessential Expense and End It.
This point goes in line with the earlier point; usually, there is an extravagance, an expense that drains your income and hinders savings. Critically review your costs, find that large hole draining your income and find ways to plug the gap.
Expensive habits like window shopping, weekend parties, or that costly early morning cup of coffee in the coffee shop. Look for cheaper alternatives to these draining costs, or do without them altogether. It might not be easy, but the result is financial freedom.
There are many ways to gain financial knowledge, one of the best ways is by reading books written by experts, watching videos, or listening to podcasts. The internet is a goldmine of information; all you need to do is know where to mine. No matter the type of financial education you are searching for, it is sure you will find a topic on it on the internet.
You are confused about investment opportunities and how to passively investment? Read about it, there’s a new investment proposal, and people and jumping on it? Check expert reviews on it. Not sure how to save your money? Please read up on it. Gaining knowledge is essential, financial literacy is even more critical.
You might not solve the world’s economic problems, but you will solve yours when you educate yourself.
Have A Budget
Having a budget is one of the best ways to plan your finances. If countries can draw up a budget of estimated income and expenses, then you should too. Especially if every month you are always left wondering where all your money went.
Budget drafting does not have to be difficult, just a simple draft of all incomes that month and all expenses in order of importance.
If you have removed expenses from income, you have some money extra, save it or put it in a retirement fund. If the costs are more than income, then start a process of elimination by removing the least high or nonessential expense until your budget is at least balanced.
No matter how beautiful your budget is, it is all naught if you don’t follow it to the letter. The essence of a budget is to allow you to live within your means. Except in the case of an emergency, you don’t have any reason to deviate from it. Therefore, financial discipline is key to adhering to budgets.
Earn Passive Income by Investing
You probably have a job or business that gives you most of your income; having a secondary source or various secondary sources of income should be the next goal. Passive income is income gained from sources that you are not actively participating in.
Examples are returns on stock or treasury bills. Passive income usually comes from having an investment portfolio, various investments that fetch periodic payment. In addition, various investment experts charge a minimal fee or percentage to advise you on the investment deals.
Financial Mappers Australia is a great example; they offer the best advice on how to grow your investment portfolio and get the best returns. No matter the type of investment you decide to put your money on, research on it thoroughly get the merits, demerits, and common pitfalls before putting in your capital.
An improved financial life is essential not just for now but for when you are older, and your income isn’t as forthcoming as it is now. Clearing your debt, living within your means, saving for the rainy day, all these are ways to achieve a healthy financial life.
Even if you follow all these steps and others written in other articles and don’t have financial discipline, you are just wasting time. Being able to overcome your present cravings and see the bigger picture is crucial for a healthy financial life.
Here is a paradox: homeowners strive to optimize the longevity of their houses, but they often pay no heed to their gutters. However, the latter plays a crucial role in your property’s protection from water damage and other associated issues. Thus, neglected gutters make for a disaster waiting to happen. Not only can they deal a nasty blow to your home’s curb appeal, but they can also contribute to its structural instability. And the list of possible issues doesn’t end here. Do you want to see why the gutter replacement cost may not seem a big deal? Keep reading. Read more
In finance and business, the term "KYC" or "Know Your Customer" has grown into a keystone principle. KYC refers to the processes employed by institutions to verify the identity of their clients, ensuring that they're not inadvertently involved in money laundering, terrorism financing, or other illicit activities. This system was traditionally rooted in face-to-face interactions and a paper trail of credentials. Due to rapid technological advancements in the digital age, identity verification has undergone significant transformations, adapting to new technologies and addressing the escalating demand for speed, accuracy, and security. Read more
In today's fast-paced world, where time is the ultimate luxury, household appliances have become indispensable. From the refrigerator that preserves our food to the washing machine that ensures our clothes are fresh and clean, we often take these machines for granted. That is, until they malfunction. This is where the importance of appliance repair comes into play, restoring our daily routine's smooth functioning. Read more