TAKE YOUR FINANCES TOTHE NEXT LEVEL
You can probably profit from increasing some part of your finances, no matter what stage of life you’re in, how much money you now earn, or how much money you’ve accumulated so far.
Following these five fundamental money rules can help you take your finances to the next level.
Practice Tax Efficiency
“It’s not about what you make; it’s about what you keep,” as the phrase goes. In other words, your gross income is one thing, but it’s your net income that counts — not to mention how you spend it. Your net income is crucial because it indicates your take-home pay after Uncle Sam deducts his tax from your salary, wages, or self-employment income.
You’ll have more income available to develop wealth if you keep a close check on your taxes. To reduce your tax burden, contribute to a 401(k) or 403(b) plan, establish a health savings account, or claim all available tax deductions and credits.
Too many of us avoid negotiating, and failing to do so can result in a lifetime of wasted money. Everything from your monthly cable bill and credit card interest rates to your annual pay and financial advantages supplied by an employer are negotiable (and should be). If you make it a practice to negotiate regularly, you’ll save and earn more money.
Protect your Finances with Insurance
Accidents, injuries, disease, and calamities of many kinds all pose a threat to your personal and financial well-being. Regrettably, such failures can happen to everyone. However, by insuring yourself, you can protect yourself against these and other hazards, such as a driver who rear-ends your car or a storm that ruins your home.
It’s significantly less probable that a natural or artificial calamity would wipe out your savings or leave you financially vulnerable if you insure your family, property, and possessions. So, assess your present needs and ensure you have enough health insurance, car insurance, homeowner’s or renter’s insurance, life insurance, and disability insurance.
Save, save and save
When it comes to saving money, anyone looking to improve their financial situation should commit to being a disciplined saver. Start putting away at least 20% of your take-home pay if you aren’t already doing so.
You can start by putting money aside for your next pay boost, or at least a portion of it. Another option is to set aside a certain amount of money each month for savings and save it without fail. If you’re already saving money, steadily increase your savings percentage to maintain your financial stability.
Procrastination can cost you money in a variety of ways. Do you have a trip planned for next season? If you wait to buy your aircraft ticket, you may end yourself paying a lot more for a more expensive last-minute flight. Worse, delaying retirement savings can result in a significant financial penalty.
Procrastinators don’t benefit from compounded interest over time for long-term savings. As a result, putting off retirement planning may result in a retirement nest egg that is tens (or even hundreds) of thousands of dollars lower than it would have been if you had started saving sooner.