In the board game Monopoly, declaring bankruptcy has no lasting effects in real life. You lose the game and move on to the next round, perhaps seething a little all the while. Unfortunately, doing the same in real life isn’t as easy.
The process of declaring and filing for bankruptcy is long and arduous, one that every person should avoid at all costs. As early as our 20s, we should start being more careful with our money and strive to attain financial stability, if not an abundance of wealth, to secure a decent lifestyle even as we grow older.
To achieve such a feat, all of us should consider the following tips below.
Pay With Cash
In this age, consumers are given the power to pay through various means, like credit cards and digital wallets. As convenient as these methods are, we should avoid using them as much as possible. It is because they make it more difficult to track and mitigate our spendings.
Instead, we should opt for cash payments whenever we can. Doing so not only helps us note our weekly and monthly expenses but also prevents us from paying with money that we have yet to earn.
Set Up A Budget
A budget is important for several reasons. One, it helps us achieve our goals by keeping us on the right track. Two, it allows us to see and correct bad spending habits. Three, it saves us during emergencies.
Now, every person has a budget that fits their lifestyle. Beginners can opt to use the 50 / 30 / 20 plan first before modifying it to suit their standards. This budget plan divides the after-tax money; we get to spend 50% on our needs, 30% on our wants, and 20% on savings and debt.
It isn’t uncommon for a person to have financial issues. While financial planners help us focus on the numbers, counsel with financial therapists allows us to see the underlying emotional and psychological cause of said issues. These therapists help us get a better grasp of our emotions when it comes to money, which leads to better handling of it.
Another form of counsel is debt counseling. In Sudbury and other areas, people who have some debt, like the consolidated kind, may find themselves overburdened by debt payments. Counselors will help conduct an overview of said debt before they make contact with the creditors to create a repayment system that is balanced and acknowledges how much one can pay in a month.
Investing is the process of allocating resources, like money, to an endeavor that can bring profit in the future. There are several ways we can invest, like preparing a retirement fund. But not all of them are monetary.
We can also invest in other areas, like our health. Staying fit and avoiding habits that can potentially harm us is the best way of going about this task.
Drinking and driving, for example, is hugely detrimental. It can kill, and if not that, take away a limb or two if one survives. It will impede upon one’s routine and result in a severe financial hit, considering how expensive prostheses can be.
Abiding by some, if not all, tips do not guarantee a life free from bankruptcy since there are other factors to consider. However, these tips do their best in keeping us on the right track when it comes to our finances. It is a proper step to a life filled with stability.