To be the boss of your own money you really need to have a few things in place, and be aware of where your money goes. If you don’t the money you work so hard for is out there helping someone else achieve their financial goals.
So how do you become the boss of your money?
STEP 1.
Have a Budget
Of course you must also follow it. If you have income than you have expenses, you just need to balance them out. Now if you weren’t good at math or figures it’s really no excuse it’s actually more important that you have some guidelines to follow. Do some research on the net if your not sure how to set up a budget, you will certainly reduce the stress in your life knowing you can meet all you expenses or that you’re on a plan to do so. It makse sense to control your money with a budget otherwise your money will soon take control of you and how you spend your time.
STEP 2.
Saving or Pay Yourself First
Well why not. You’re out there working; you have to take care of yourself. Take 10% of your total earnings and put it in a place that is not easy for you to access. That may be a savings account with no atm card or a special purpose or term deposit account. Special purpose accounts help you save for something in particular like Christmas or a holiday and term deposit accounts lock your money away for a specified time, they also attract higher interest.
STEP 3.
Investing
OK this is where it can start to get fun because here is where you get your money working for you. This is how the rich get rich. You can invest in business, property or shares at least these are the main areas people use and they are a good place to start. The type of investment you choose depends or how you want your money working, how you want to realize your financial gain and how much risk you want to take.
STEP 4
Using Credit or Other Peoples Money
So here we have it the good the bad and the ugly. Yes we all know there is bad credit that’s the kind you use to buy goods you should have really used your savings for. The ugly part of that is it costs you a lot more in the end to buy your goods this way. Did you know that if you have a credit card, even if it is only $1000- and you only ever pay the minimum balance required each month, that you will never pay that credit card off. Who’s the boss of that?
Think about whether you can afford the repayments. Is there room in your budget for the extra commitment? How much is the item going to cost you over time, once you add interest, fees and charges? If you take the time to work this out it just may make you think twice before you sign anything. How long will it take to pay the money back? The longer you take to repay, the more you are likely to pay in interest. Will you be able to keep up the repayments if you lose your job or get sick?
There is good credit however, for example when you borrow money to buy an asset such as a house, in time the house will be worth more than what you borrowed. This extra money, commonly referred to as equity, can be used to fund more investments. It is important to understand what commitments you are making whenever you do borrow money, there will always be extra costs to you in fees, charges and interest, just make sure the financial benefits make the expense worthwhile .
STEP 5
Control Your Debt
This step is really important, it can be far too easy for the debt cycle to exceed the income cycle. If you have a mortgage, credit or store cards then you have debt, falling behind in repayments only adds to your debt, making it even harder to resolve. If you have a mortgage, avoiding or keeping to a minimum, other forms of credit would be wise if possible. If you find yourself overwhelmed with debt always communicate your position with your lenders, most are more than willing to help you get back on track. Doing this can also assist you in avoiding charges for late or missed payments.
Being the boss of your money takes some self discipline but it is well worth it, a little effort in this area could see some great rewards.
Have a rewarding day
Teresa and the Team at
