Working all day long and then discovering that you don’t have enough money for the essentials in life is a depressing experience. You’d love to be able to afford a better lifestyle. But for one reason or another, you just can’t.
If you never have enough money for the essentials – such as food, clothing, housing, transport, socializing and entertainment – then this post is for you. We run through some of the things that you can do to improve your situation and get out of a rut. Don’t define yourself as “poor.” Instead, see life as being full of unlimited opportunities.
Start Learning How To Invest
If you think owning a stock portfolio is just for the rich, then think again. It turns out that practically anyone can start investing, even with a small amount of money. Platforms, such as Robinhood, make it incredibly cheap to use brokerage services, providing access to markets for anyone to build capital.
When it comes to investing, the best thing to do is follow Warren Buffett’s advice. He says that retail investors who don’t have experience in the markets should use market tracker funds. These are just ETFs that you buy that follow the market. On average over 20 years, you can expect to make substantial returns.
Unless you know what you are doing, you should avoid buying individual stocks. It is risky to purchase a single company because they can go up as well as down.
Once you start investing, you can begin to develop a second income stream. On average, your investments will grow every year. And this growth can provide you with dividends that supplement your regular income.
Save More Without Being Frugal
If you don’t have enough money for the essentials, then saving money seems like it is out of the question. But it turns out that most people in work can save more by making simple lifestyle changes. It’s not about cutting spending to the bone. Instead, it’s about finding ways to maintain the same quality of life while spending less money.
Consider your housing, for instance. Could you find somewhere cheaper in a different neighborhood that offers the same floor space and amenities? Almost certainly, you can.
Could you wipe out your money trouble by selling your car and cycling or walking to work instead?
Many times, you will find that there are changes that you can make without actually having to scrimp and save all the time. If you can reduce big expenses, like your home, that can help free up the rest of your life tremendously.
Start A Side Hustle That Makes Money
Most people think that side hustles are a myth, but they aren’t. There are millions of people making extra cash every month just by selling various services online. What’s more, many side hustles are actually a lot of fun.
For instance, there is a whole community of people making money on sites like Etsy and Zazzle just selling craft items that they make. There are also people making money with part-time writing or tutoring gigs. Usually, you can find something that really appeals to you and provides you with a good income at the same time. Often, you will find that your side gig is actually more lucrative than the regular nine to five, allowing you to transition to it full time.
Get The Right Cover
Often, staying on track financially requires purchasing the right cover. Many people can get into the habit of believing that they are financially secure until a crisis comes along. Then they discover that they don’t have enough money in the bank.
Take funeral costs for instance. When a family member dies, you don’t always have enough money to pay for the expense of the ceremony. But with the right cover, you get the money you need. The same goes for medical insurance. If you can find money for the premiums, you can avoid high out of pocket expenses in the future..
Learn That Money Is A Long Game
Making a lot of money takes an enormously long time. People can spend their entire lives saving and investing. Warren Buffett is a good example. He has been in the game for more than 60 years, consistently buying income-generating assets. At first, his gains were modest. But then as he stuck with it, the rewards continued to grow each year. Eventually he became one of the wealthiest people on the planet. And it’s not just because he worked hard or is super smart. It has to do with the nature of saving and investing itself: the longer you do it, the more money you will make.
Try it for five years. Depending on how the market performs, you’ll often find that at least 50 percent of the value of your portfolio is just interest payments. In other words, you grew your wealth by half just by waiting. If you wait 10 years, you can double your wealth, and if you wait 20, you can quadruple it.
Consolidate Your Debts
Debts are a substantial drag on your monthly finances. That’s because you have to pay out extra money in interest as well as paying back the principal. It works in the same way as investments, just in reverse.
However, you can reduce your debts faster by consolidating them into a single loan. Here a debt management company pays off all your existing debts and then offers you a single loan with a single rate of interest. It makes repaying your debts easier and often leads to lower interest charges.
Suppose for instance that you have a bunch of personal loans and credit card debts. Monthly interest rates can easily top 5 percent, making this kind of borrowing unsustainable.
By consolidating them, you might be able to bring this monthly rate down to just 1 percent. This way, you can get a handle on your debts faster.
Create A Plan
If you want to get out of your current money situation, you need to take big action. You can’t continue living your life in the same way. That won’t work because you will wind up with the same problems.
Instead, set out what you need to do to get to the financial position that you want.
Let’s say, for instance, that you have a big goal: you want to make $1 million. How do you get there?
Well, it all starts with the first step. You have to agree with yourself that you’ll put away a certain amount of money every month. And you need to commit to it long-term. If you stick with your plan, you will make it, even if you invest only small amounts of money each month. However, you need to have the fortitude to do it: and you need to understand the maths.
In some situations, you won’t have enough spare income to make it work. If that’s the case, don’t give up. Go out and acquire the skills that you need to work a higher-paying job. If necessary, borrow to fund your education. Upgrading your skills justifies going into debt because the long-term payoffs are so substantial.
You can also take a totally different approach and start something brand new yourself. It’s a riskier strategy because it won’t always pay off. But when it does, it pays off in a big way. You can find your finances transformed virtually overnight. This path eliminates the need to save and invest for many years, providing you with the lifestyle that you want faster.
