The KEY to making a change is knowledge and that knowledge doesn’t have to be complicated it just has to be executed. Take a look at these 4 simple principles and see where you can make a change.
4 Personal Finance Principles to Live by For a Richer Life
Taking control of your personal finances is key to living a more stress-free and stable life — a truly rich existence. All you need to do is take the first step: start becoming more aware of your bank account, and live by these very basic principals that just about sum up what personal finance is all about.
1. Pay yourself first
This is a common personal finance phrase that many people live by. But what does it really mean? No, paying yourself first isn’t buying anything you want and letting your bills collect dust. Basically, it means that before you spend your new paycheck on necessities or wants, you should squirrel away a portion of it to your savings. Getting into this habit is helpful because you’ll learn to prioritize saving, and the steady stream of monthly contributions is the best way to grow your emergency, savings, and retirement accounts. The best and easiest way to pay yourself first is to automate it so that the process is mindless.
2. Live within your means
Don’t spend more than you can afford to spend. Don’t take on loans or debt if you can’t afford it. This even means being cautious on what is generally considered “good” debt. Ever since the financial crisis, all of us had to reassess what we initially thought of as good debt, which includes mortgage, school, and car loans. Once people started getting laid off and defaulting on payments, the good debt very quickly becomes bad. That’s not to say that you shouldn’t go to the college of your dreams; but you should still weigh the costs while keeping in mind realistic expectations of job prospects postgraduation. And if it’s truly worth your investment, you should find ways to cut costs. Other than not taking on debt, conscious spending is also part of what it means to live within your means.
3. Prepare for the long term and the worst
Don’t spend your time living only in the here and now. Think ahead, and start preparing for your retirement and emergencies by starting an emergency fund and contributing to your retirement accounts.
4. Knowledge is king
Keep reading and keep learning about how to better your personal finances. This is just the start of your journey, and there is so much out there to learn