A vast majority of people feel they own their personal finance. Unfortunately, it’s not always the case, and you’ll be surprised how little control you actually have on the money you work so hard for. Whether it’s from the variable interest rates you pay on your loans or the unforeseeable medical expenses that burn holes through your wallet, you may not be fully owning your personal finances. Here are four tips on how to regain back control over one of the most important commodities in your life and, consequently, live a happier existence.
Diversify Your Funds
It sounds like overused advice but diversifying your available cash funds is a good way to grow it compared to letting it sit in a savings account to accrue pennies per year. By diversifying your money to bonds, stocks, and the likes, you give yourself a financial cushion in the event that your income source or business venture goes south.
Plan For Rainy Days
In today’s economic climate, it makes sense to plan for rainy seasons instead of just days. This is especially important if you are unemployed or underemployed. Loss of income without any savings to cushion the blow can magnify the damages to your lifestyle as well as limit the decisions you can make. To own your personal finance, have a manual you can look at whenever unexpected variables and curveballs come popping out of nowhere.
Work to Live, Not Live to Work
Call it a cheesy saying, but this one-liner definitely has substance to it and has become more relevant nowadays than it ever was. Working a dead-end day job 40 hours every single week of the year does pay the rent, but be sure to have a long-term plan that you are working towards otherwise, what’s the purpose of working? Continuously improve your earning potential by pursuing higher education, networking, and increasing your knowledge base.
Have a Complete Record
Have a record of anything and everything you buy or finance. This way, you know when upcoming payments are due, how much your expenses are compared to your income, and what viable solutions are there to improve your financial situation. Having a record of income sources and item purchases is also a good way to maintain accountability for your spending habits. Be sure to color code expenses and income growth so you can easily analyze the books at the end of every fiscal year.
David Milberg is a New York financial analyst.