May 2019 – Personal Finance

How to live a balanced life

Learning how to manage your money and being smart with your resources will take you a long way in life but it is possible to go to extremes. A lot of people are up to debt to their eyeballs and they need assistance to break free of the borrowing habit which makes them a slave to their lenders. It is those people who are so tight with their money that they have lost all sense of priorities that this article is aimed at but even if you are not one of those people, you as we all are have room for improvement when it comes to how we priorities our spending or rather what we do not spend our money on.

It is what we Sacrifice that really determines what takes priority in our lives. There are moments in life which are just priceless such as spending time with your kids. How much value would you place on having an ice cream with your kid?

What I am saying is that, it is all very well being tight with your money but if it takes away what life should really be about then you need to reassess your priorities.

It is important that you not try to live a champagne lifestyle on a lemonade budget because you will end up working all the time without enjoying what you have.

Your age, marital status, and work situation will all determine your priorities in life as will your financial situation.

If you are young, you have more time to recover from financial mishaps, more so if you are single therefore are able to take more risks.

Someone in retirement may be advised to invested their money in something which can quickly be converted back into cash.

It is really up to each an every individual or family to prioritise what is important to them and decide what is worth making a sacrifice for.

I remember years ago, a man close to retirement age told me that his brother who was living with their elderly parents had 25k saved up in British pounds and told me his brother doesn’t enjoy his money. He was saying that he lived a sheltered life and never went anywhere.

Saving for your retirement is a good goal to have but you need to make the most of your stage of life. It is important to frame your life around your own circumstances, priorities, and your income level but at the same time not to live beyond your means. You do not want to get to the end of your life thinking, “I wish I had done this or that”. If you love sports and have some talent in anything and have a dream to become an international sports person, musician or whatever then you may be advised to follow your passion before it is too late. You don’t want to get to the end of your life and say, “If only”.

It is a mistake to make money your number one goal at the exclusion of everything else because at the end of the day, life is more than money. What I am saying is that it is important to get your priorities in order but it is up to you to decide what is important to you. It’s your life, ENJOY IT!

www.robertastewart.com

Turn dead money into seed money

Financial success is much easier than you think and is often just a matter of prioritizing your spending. The first thing to do is to find out where your money is going and where is disappears into the sunset never to be seen again. Much of this type of spending is dead money because you have nothing to show for it. You need to convince it to stay at home and work for you rather than fill someone Else’s pockets.

There are a number of money leaks which drain your finances so lets take a took at some of the main culprits.

INTEREST

If you have hire purchase loans, credit card loans, or bank or finance company loans then a good deal of your money is being spent servicing the loan. There is a cost to using other people’s money to buy stuff and that is called interest. In order to become debt free and save money, you need to decide on what youer priorities are and MAKE SACRIFICES. As painful as it may sound, you must do an audit in order to work out how much of your money in going in interest payments per annum.

If you are seriously in debt then talking to a budget advisor make sense.

STUFF YOU NO LONGER NEED

Everyone has stuff they no longer need just lying about around the house. This can all be considered “dead money”. Your stuff can be converted into cash and turned into seed money for your future wealth. Selling the stuff on ebay will give you some extra money to invest. You can then put this money to work for you.

HOBBIES AND SPORT

People will spend a fortune on their hobbies and the question of whether the amount you are spending on yours is going to affect your financial plans in the future. We hear of people who spend absurd amounts of money on whatever they are collecting yet when it comes to retirements savings bury their head in the sand. The money spent on this stuff is really dead money because it is not producing any wealth.

Sport is in a separate category altogether because being a participate in sporting activities promotes health and well being but you are able to minimize the amount spent so that what it is costing you does not get out of hand.

MONEY LYING IDLE

Money just lying in a low interest account earning just 2% interest is losing its value because when inflation and tax are both considered, it has lost its value and is worth less than 12 months ago. It all depends on what the purpose of that money is. If it is rainy day money then you may be better off investing it in Bonus Bonds where instead of being paid interest, you go into a draw to win prizes including a million dollar prize. It may be a long shot but at least you have a chance.

It all adds up during the course of a year. $4 or so for one cup of coffee per day does not sound much but if you buy say three cups of coffees per day that is $12 per day you are spending on coffee. That is $60 per week (5 days per week) and during the course of a year, that is $3,000 worth of coffee you are drinking. That could be your retirement savings or an overseas trip, or whatever you may prefer to spend your money on which you can see with your own eyes what your labours have paid for.

Learn to look at your spending on an annual basis because it does not sound like money money when you are paying for something in small amounts but like a dripping tap, leaks like this can add up to a lake. These little money leaks can then be used as your seed money to build your future wealth.

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Month: May 2019

LIVING A BALANCED LIFE

TURN DEAD MONEY INTO SEED MONEY