10 Keys To Healthy FinancesPosted by Agatha Cheng
Ruth Hadikin refreshes our memories about basic financial management.
I am not a financial advisor. This is good old-fashioned common sense, much of which was dispensed by my Mum, along with advice such as 'don't spend what you don't have'. Seems obvious doesn't it? These are the ten key rules to having healthy finances:
1). Know what you are worth. Not just how much you earn but how wealthy are you? What do you own? What do you owe?
For most people this is a reality check. It is not comfortable but it is a starting point. You need to know exactly where you stand. Do you have more coming in than going out? Or is it the other way around?
2). Have money left over after the bills. If you have more going out than coming in, you can only do two things: increase your income or reduce your expenses. Take whatever steps you need to, to ensure your income exceeds your outgoings.
This might include: Reviewing your spending and cutting back as much as possible. Working out a 'survival budget' - how much do you need in order to get by, pay your bills and eat? Taking on extra work to boost your income.
3). Clear any debt as soon as possible. Debt is a black hole. It just sucks away at you and is a drain on your resources.
It is possible for debt to reach a point where you couldn't live long enough to pay it off. Make sure you are paying off as much as you can afford, and make a firm commitment never to borrow money again.
4). Make credit cards work for you. If you can't manage credit cards and you are always up to the limit and paying maximum interest, it might be as well to cut them up now. Interest rates on credit cards can be hugely variable.
If you have a high outstanding balance, shop around for a lower interest rate. Or even consider getting a bank or building society loan at lower interest again, and paying off what you owe. If you keep a card for emergencies, or online shopping, make sure you pay off the balance before you get charged interest.
Again, shopping around will help. Make sure you don't need to pay an annual charge just for having the card.
5). Earn what you are worth. This might seem obvious, but so many people undervalue themselves. Many people don't even attempt to go for a promotion or better job in the false belief that they couldn't get it or aren't smart enough.
Don't undersell yourself. Let go of the belief that you aren't worth it. You are.
6). Use cash whenever you can: Try this for at least one week and see what happens. We value money so much more when we see the notes and coins rather than just plastic cards.
Notice how much more likely you are to spend £100 on a card than 'break into' a £20 note.
7). Save at least 10% of what you earn: No matter how big your debt or what you owe, start saving. Put some money somewhere for you. It sends a very important message that you are prepared to back yourself. Try it.
8). Give money to a deserving cause: You decide what 'deserving' is. You've heard the old saying: money was made round to go around? If you try to hold on to your money too tightly it stagnates and withers. Money needs to breathe and flow. The more you give, the more you will receive.
9). Love your money: Love is a verb. It is something we do. Our pets thrive when we love them. Even our plants thrive when we love them. Healing and growth are accelerated in the presence of love.
Actively love your money! Get a piece of paper and write down everything you ever heard about money. Look how much of it is negative. If you continue hating your money, it will never grow. Love your money for all the good it will allow you to do in the world.
10). Invest wisely: Don't put all your eggs in one basket. No matter how small an amount you have to save, spread it around. Find out the difference between 'safe' and 'risky' investments and never invest more than you can afford to lose.
© Ruth Hadikin. firstname.lastname@example.org
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