Making the Best of Finances

Is your day filled with greatness, mediocrity, or below average actions? I feel we all need to take advantage of all of life’s opportunities including making the best of finances. People might be questioning this, and ask how am I winning with finances? Some might be killing it saving over 50K in income annually, while others might be embarrassed to say they don’t save 1 dollar per year. How can you be content with your financial picture today, and still have the ability to save some dollars away for tomorrow?

Making the Best of finances takes a simple yet effective approach, and it starts by taking action. Life can and will always be complicated but if you set up a plan with an automatic system you can’t lose. Think about it, how silly is it that some people can’t save or invest a $100 dollars a month, yet they make over 35 thousand dollars a year. In this step set up an automatic transfer from direct deposit to an online savings account A.S.A.P. If you break it down by a simple ratio it looks like this:

$100 X 12 months = 1200 annually / 35,000 annually = 3% annual income

Making the best of finances also takes a constant search of knowledge. Because if people stay stagnant in life you can’t open the door to learning new things and that is truly unfortunate. New financial rules emerge constantly, new tax laws are updated to benefit us, and at times to our detriment. I think its best if you read at least 1 financial book per month, and if you can’t for whatever reasons, find someone who can guide you with staying up to date with financial knowledge.

Making the best of finances is also accomplished by having goals that keep you grounded in understanding the power of building wealth. What’s the ultimate goal in life when speaking about finances? To not have to worry about money, when an unexpected financial emergency situation strikes. Well by having goals in line with accumulating assets, you will eventually succeed in that aspect of your money life. A consistently dabbling here and there of investing in assets that produce pure hard cash, will one day allow you not an inch of concern. Assets produce cash, and the future prospect of growth. One day if you stay the course and invest, those assets will cover expenses and then you can chill on a beach.

Making the best of finances is also done by maintaining a steady method with how to deal with expenses and liabilities. As your income grows year after year, you don’t want to act like Michael Jackson, and begin buying amusement parks and monkeys just because you can. Behaviors based on consuming rapidly because money is abundant will never lead to a positive outcome. If you recall MJ was close to bankruptcy at 1 point before he passed, and he earned over a hundred million dollars in his lifetime. The income doesn’t matter if you can’t reign in expenses at the 35K level or the 250K income level. Set an annual expense budget and don’t go over it unless it’s necessary. A helpful tip to help you stay true with expenses is this:

Current Emergency Fund savings = 5,000 x 10% = 500. Don’t go over 500 dollars on any 1 purchase unless planned for/saved from cash flow. Increase savings and you can increase the purchase amount based on the 10% rule.

In conclusion there are many things we can do to help us make the best of finances, money management, personal finance, etc. But if you don’t take action, search for financial knowledge, have goals, and control expenses then you will set yourself back year after year with Money management abilities.

Further Reading: US News

Comment on how making the best of finances helps you?

Rich Uncle EL

Pic courtesy of Stuart Miles from Freedigitalphotos.net