It’s that time again. I love my maxims, my little mottos for personal finance success. They’re not always the silver bullet, but there are worse rules to live by than the ones contained below.
Get paid what you’re worth and spend less than you earn
In a nutshell, the key to financial success. Getting paid less than what you are worth is a common trap for the modest and the unassuming. Being able to negotiate a better wage and being brave enough to look for work that matches your skills and experience is a hard lesson to learn, but it’s a crucial one for your financial success.
Spending less than you earn will always be one of the hardest things to do, and one of the most important. Re-read David Copperfield if you want to know why.
The only way to ensure you spend less than you earn is to have a comprehensive budget that tracks your outgoings and income. If you know where the money is going, you can control it. If you don’t know the source of your money problems, then you are left helpless.
Pay off your credit card
Delayed pain and instant gratification, sounds like a win-win. Except that when pain is delayed, it is felt ten-fold. Don’t let the ease that a piece of plastic brings with it damage your finances permanently. Pay off your credit debt, and you’ve overcome a major obstacle to financial success.
Contribute to the future
Don’t ransom your retirement in order to maintain a pleasant present. Of course you should enjoy the present, but not at the cost of your future. Setting aside money can be done with minimal pain, and will leave you well set-up for the years after you’ve done with working.
Have a savings plan
Obvious right? Not in the slightest. Write down your financial goals, short and long-term, and then work out a savings plan that will help you to achieve those goals. Always pay yourself (or your savings account as the case may be) first, and you probably won’t even feel the pinch too severely.
This is in no way my area expertise, but careful and prudent investment- if you feel up for it, have secured your retirement and emergency fun, and have good advice- can be beneficial to your finances. Gambling is not a form of investment, needless to say.
Maximise your employment
Contribute extra to your super. Think about ways that your workplace agreement could save you on out-of-pocket expenses. Negotiate, negotiate, and negotiate.
Review your insurance
Too much insurance will make it hard to get ahead, if all your money is directly deposited into paying huge premiums. The converse is also true, stay underinsured and you’re leaving yourself and dependents very exposed. Work out the right level of insurance, and ask an expert’s advice if you want to make sure.
Update your will
Don’t make the most obvious mistake of all. Keep your will updated, and your peace of mind will thank you for it.
Keep good records
The beginning and end of good financial security is keeping good, well-organised and accessible records. Without them, getting on top and staying on top of your finances may be impossible. Catalogue them chronologically, keep them in a file that you can easily get to and update them on a monthly basis. It’s an easy way to stay ahead.