Everyone wants to have financial freedom, but the number of books and media geared to helping people achieve that can seem overwhelming and contradictory. Luckily, there are a few tried-and-true methods to get your wealth working for you.
The first step to making your money work for you is a financial game plan. You need to take an honest look at your finances. Where are you doing well? Where are you spending too much?
If you don’t have a system for tracking your spending, it is a great time to develop one. The first step is to track where your money goes and separate it into a giant pie chart.
You should divide the pie chart into health expenses, entertainment expenses, grocery bills, etc. Next, you need to set financial goals for the upcoming month and year. Here are some examples of questions you should ask yourself.
- Where are the areas you need to lower your spending?
- How can you increase the money that you’re putting into savings and investing?
- Do you have a retirement plan? Do you need to start a college fund?
- Do you have any debt? What is your plan to start paying it off?
By setting your financial goals before budgeting, you can budget with a clear idea of what you want. Your budget shouldn’t make you feel restricted. It should make you feel like you’re realigning your finances and working towards a goal.
Now that you have a good account of your current finances, you need to get serious about increasing your income.
While saving is good, the hard truth is that only saving will not help you increase your income that much. You need to be doing something with the money that you are saving.
If you currently have a job or run a business, ask yourself how you can improve your value. What are the extra skills you can learn that will lead you to make more money or get a promotion?
Work hard and communicate with your boss. Many organizations have leaders that are open to career counseling sessions where you can talk to them about your plans for advancement within the company.
You need to be ambitious and communicate efficiently. Make yourself valuable and then negotiate yourself to a higher position or salary. Even an extra $1,000 goes a long way to increase your financial leverage.
If you don’t have any money invested, it is time to change that. There are many ways to start investing, and they can get overwhelming, but investing is the primary way to make your money work for you.
One easy thing you can do is look for a different bank with a higher interest rate. Those banks will have your savings, earning more money.
The next thing you should do is look into a Roth IRA. A Roth IRA is an individual retirement account that will not be taxed after retirement. Some companies even match your contributions into your account. It is a great way to begin investing.
Finally, make sure to stay informed as to what is happening in the financial world. You can check the news, listen to financial podcasts, and get live earnings transcription services for companies in which you want to invest.
Live earnings transcription services provide a transcription of live earnings calls without you having to attend each meeting.
Lastly, if you have even a little extra time during the week, you should consider investing some of your money into yourself and passive income endeavors.
The trick with passive income gigs is that they take a lot of work to start, but once you reach a certain level of success, you can profit.
For example, you could write an ebook and sell that. You could create a dropshipping store and profit from the sales. There are less intimidating methods as well.
You could advertise with your car or run social media advertising accounts. There are business opportunities everywhere.
It’s best to start with low-risk projects first and invest more into yourself and your side hustle when it begins to make money.
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While the world of investing and saving can be intimidating, it is never too late to start. By changing just a few simple financial habits and being honest with yourself, you can greatly increase your income within the next few years.