Sunday, April 9, 2017
The Secrets to Living a Financially Comfortable Life
Life can be a pain sometimes. Whether it’s accidents that could’ve been avoided, natural disasters that were unavoidable, or industry shifts that have caused damage to your job security, life can be unpredictable. However, it can also be good to us as well. Perhaps you have a stroke of luck that propels you into a new career path, or maybe you get lucky and manage to catch the last train home on a busy evening.
Whatever happens, life is what we make of it. For all the horrible things that affect our lives, we also get an equal amount of positive things. As such, we need to make the most of each situation in order to live a comfortable life. So be it misfortune or fortune, here are a couple of secrets that will help you live a comfortable and stress-free life.
Save money, but within reason
We’ve all heard about opening a savings account and storing all of our money inside. In fact, we may even think about investing our money in something like stocks and shares, businesses or even another house. While these are definitely good options, it’s always good to have a plan when you save money.
For instance, perhaps you want to save up enough money for an emergency fund. Emergency funds are useful because if you ever lose your job, have a period of no work, or simply need an injection of cash to repair your home, then an emergency fund will get you out of a sticky situation. Set a limit to how much you want to save for your fund, and then once you reach it, you can stop putting money into it and you can invest your money into something else. You might also have plans to save for a house. Use an online mortgage calculator and work out how much you need to pay for the initial deposit, and once you reach that amount, you can start to put your plan into action and take out a mortgage on a house.
If you don’t set a goal for your spending, then you’ll just save money for no reason. Money needs to be spent in order to make use of it. There’s no use saving for a goal that is far into the future. Many people worry too much about their retirement fund when they’re still in their 30s, and while it’s an admirable goal to think about the future, it’s also rather foolish. Instead of worrying about money you can spend in 30 to 40 years time, worry about spending money on things that are in the present.
In short, remember to spend money on things that will improve your life in the present and don’t think too far into the future. Set yourself a budget and contribute monthly payments towards savings goals such as an emergency fund or a future mortgage.
Learn the value of everything around you
No, this doesn’t mean to attach a price tag to everything you own. What this actually means is to find the monetary value in everything you do. For instance, consider the implications of a night out. You’ll need to pay for travel fees, you have to pay for drinks and food, and you might even spend money on accommodation if you’re far away from home. This all adds up in the end and it takes some time to recuperate those costs, but you need to decide for yourself if it’s worth the money to visit your friends and have a fun night out with them. Knowing this, you have alternatives. For instance, you could have a night in with your friends instead of going out. You might not meet new people, but you’ll still have fun, it’s cheaper, and it opens up more simple pleasures such as playing a board game or watching a film.
It’s also worth noting that you can learn the value of your misfortunes too. For instance, if you have an accident, you need to consider the costs of medical fees, how much money you lose (if any) for being off work, and how much money it will cost to live with an injury. If you’re having trouble with these costs, then it’s recommended you get a lawyer and make a personal injury claim. The trick to dealing with misfortune is to find a way to turn it into a positive, and in most cases, this means making a claim.
You should also try and learn the value of the items you’ve bought. People often get carried away because they buy far too many items and leave them to rot, but you’d be surprised at how much money you can get for a device which is only a year old, even if it’s been heavily used. For instance, if you upgrade your computer or phone on a regular basis, don’t keep around your parts for spares and instead, sell them to someone else on Gumtree or eBay. Take good care of your items so they retain a good sale value, and always declutter your home by getting rid of unneeded items. It’s a fantastic way to make a bit of extra money and ultimately pay less for your favourite stuff.
Don’t let other people influence your financial situation
Something that a lot of people miss out on is benefits and welfare payments. For instance, you might get help because you’re unemployed or because you are having trouble paying rent. While these welfare payments don’t exist everywhere, many people miss out on them because they refuse to be labelled someone who lives off welfare. It’s this kind of stubbornness that can seriously reduce your quality of life. In general, you should always be trying to look for all the benefits you can and ignore what other people say about your situation. Those payments are there to help you for a reason, so why not take it?
Another place where people can save money is to buy second-hand or refurbished goods. The latest technology is always breaking because of hardware issues, which is why many companies specialise in refurbishing old units in order to get more use out of them. A Macbook Pro refurbished could be up to 20% cheaper, and it still performs just as well if not better than a new Macbook. This is because a refurbished computer will have its internals replaced with new parts and all the problems will be worked out and remedied. This makes it much more stable and reliable. However, stubbornness and peer pressure usually prevent you from taking the plunge and buying refurbished. In general, don’t let other people affect how you feel about your purchases, decide for yourself if something is worth it and be frugal when possible.
Live within your means
There are a couple of rules to living a financially comfortable life, and that involves setting yourself a limit and not going over it. Whether you’re rich or on a low income, you have to live within your means. The best way to do this is to set up a budget so that you know how much money you’re spending. You can use some software such as a budgeting app to help you do this, but the best way to get started with budgeting is to simply look at how much money is coming in. Write this number down and then subtract your living costs, such as your rent, utility bill payments and groceries. Whatever money you have left over is counted as your disposable income, and you’ll be able to save it or spend it however you feel like.
However, if that amount is in the negative, then you’re probably overestimating some of your living costs. For starters, check out your grocery list and see if you can make any cuts there. You might be buying food that is far too expensive to eat on a regular basis, or maybe you’re eating out too often and should cut down. Perhaps you’re spending a lot on your electricity bill because you leave your lights and computers on 24/7, or maybe you’re powering an expensive home cinema setup despite being on a low income.
It’s not the most pleasant feeling, but you need to understand what your costs of living are and how you can cut down. There are many people who spend a lot of money but always have no money before their next paycheck because they live beyond their means. If you’re one of these people, then you’ll just have to accept that you need to cut down on expenses and live more frugally. If you don’t, you could end up in serious debt. Neglecting your financial responsibilities is a path that is hard to recover from, so focus on improving your situation as quickly as possible.
To summarise, living a financially comfortable life is done by being truthful with your spending. Don’t lie to yourself about what you can and can’t afford, don’t save money needlessly, and always value the possessions you have and understand how money flows in and out your of life under different situations.