Denice R. Preston
Ever wondered what you could do to improve your finances and future? This is our list of the most intelligent financial decisions anyone can make.
Create a Budget & Spending Plan
You will never be able to get ahead if you spend more than you make. This is a sign that you’re headed into financial trouble. Track your expenses over a few months and create a budget. You can create a simple budget.
Pay off Debt to Stay Debt-Free
To improve your financial situation, you should pay off your debt. Start by paying off your highest-interest debts, such as credit cards and loans. After you’ve paid off these debts, pay off your mortgage. Consider splitting your monthly mortgage payment in half and paying every two weeks. Pay extra when you can. You will save thousands in interest and shave off years from your mortgage.
It is possible to achieve your financial goals by avoiding or minimizing monthly debt repayments. Just follow a budget and allocate funds each month for your top priorities. Consider this: The average Canadian monthly car loan payment is only $570. If you invest this money between the ages of 25 and 65 in index funds or mutual funds, with an average return rate of 11% over the last 70 years (as the S&P 500 did), then by the age of 65, you will have more than $4.2 million. Now we have to ask ourselves: Is having a brand new car all the time worth $4 million? We suggest you consider purchasing a used car and investing the remainder. Your old car payments could end up funding retirement or other financial goals. (By the way, you can start saving at any age. The person in the above scenario could have saved the car payment for 40 years and still accumulated over $1 million.
Set Savings Goals
It is essential to save money for the future. You must use credit when it gets tricky if you do not set saving goals and work steadily towards them. You may need to continue working during your retirement to supplement the small pension the government provides. You may be unable to retire if you have debts.
Start saving regularly using a TFSA or RRSP.
Plan your retirement. Start saving when you know how much money is needed to retire comfortably. The money you save can also be used as a rainy-day fund in case of unforeseen financial hardships, such as losing your job.
Insurance is important. Accidents do happen. One in four people is injured at work. Natural disasters are capable of causing thousands of dollars worth of damage to your house. You should have adequate insurance to cover your lifestyle and where you live.
By writing a will, you can decide who gets your assets or takes care of your kids when you pass away. You can determine who will benefit from your hard work.
You can start saving as early as possible, but it’s never too late to begin.
Even when interest rates are low, those who start saving for retirement earlier will not have to save nearly as much money as those who begin later.
If two people start saving for retirement at different ages, the one who starts at age 21 can save $100 a month up until 65 years old and accumulate $253,000. (assuming a return of 6% per year) A person who begins saving at age 31 must save $190 a month to reach the same amount of money by 65.
The second person must pay nearly twice as much each month to compensate for the 10-year delay. You can start saving anytime, but the earlier you begin, the better.
Make sure you do your homework before making major financial decisions or purchases.
Most people do more research on television than they would before investing in a house or purchasing a property. Don’t be one of those people. The two biggest financial decisions most people make are buying a home and saving for retirement.
Do Not Make Hasty Financial Decisions – Sleep on It
No major financial decisions or purchases need to be made immediately. Being pressured to make a quick financial decision can be a warning sign that the deal is not as good as you think.
How To Avoid Investment Scams and Frauds.
If you wait, all profitable opportunities will come your way another day. Waiting and learning a cheap lesson is preferable to rushing into something and learning an expensive lesson.
You can take time to think about alternatives, assess whether or not you need to make the decision and get other opinions. You should do these things every time you have to make a significant decision, but especially when it comes to financial decisions.
Stay Married
According to studies, married people have higher incomes and twice as many assets when they retire. They also live on 25% less money than comparable single people. Statistics show that staying married can be good for your financial situation.
What is the smartest thing you can do with your money?
You may have some great ideas for things you can do to improve your finances and money. Other people would also like to hear about them. Share your thoughts by leaving a comment on the Facebook Page!
