After struggling with your finances for years, you’ve finally gotten your head above water and can see the light at the end of the tunnel. While you certainly deserve a pat on the back for a job well done, there is still a lot to learn. What must be understood is the financial freedom and wealth management are lifelong processes. Many people make the mistake of assuming that because they’re out of debt they have nothing more to worry about. However, if you’re not careful, you could find yourself right back in the same place you were a few years back…if not worse.
Discipline and Knowledge
The key to remaining debt free and financially secure is discipline and knowledge. Learning the best practices for managing your money and having the discipline to follow through will minimize the chances of you falling back into debt or financial distress. Whatever you’ve done to get yourself to this point, you must stick to it and continue to expand your knowledge so that you can properly prepare for what’s to come….
Now that you’re out of debt, you have wiggle room and a bit of money to play with. Before you go and splurge on an impulse buy, it’s probably best that you learn what’s next in managing your money responsibly. To start, you should:
- Continue to Budget
- Learn to Save
- Grow Your Money
Continue to Budget
As stated above, you MUST remember to continue the practices that got you to this point to begin with. Budgeting is a big part of money management. To properly gauge where your money is going you need an effective budget in place. Budgets help you to stay on target and prevent you from making financial mistakes that could land you back in debt. Therefore, if you’ve had a budget in place, stick to it.
Learn to Save
When you’re in debt, saving is a bit challenging to accomplish. For every dollar you save, there’s another ten dollars that you owe. So now that you’re out of the web of debt, you can begin learning the basics about saving. Saving your extra money may not have been what you had in mind, but it does provide you peace of mind and allow you to accomplish financial goals. When it comes to saving, there are two areas that you should consider putting up for: a rainy day and retirement.
- Rainy Day Funds –Financial advisors recommend saving for the long run. Even if you’re only saving a few bucks per month towards your rainy day fund, having cash that you can easily access is imperative in these economically trying times. Based on your budget, you should be able to determine how much money you can put towards your emergency or rainy day fund. The goal is to eventually save at least six months to a year’s worth of income.
- Retirement Savings – It’s never too early or too late to start saving for retirement. At some point in your life you’re going to want to put away the business suit or work uniform and enjoy your retirement. Find out how much you will need to live on for retirement and begin putting money away. Even if you have a 401K or pension through your employer, having additional savings is ideal.
Grow Your Money
Wouldn’t it be nice if you could sit back and let your money work for you? Well now you can. Investing can be a very lucrative way to watch your money expand over the next few years. Decide what you’re interested in and begin investing. Whether it’s real estate, the stock market, gold, or silver, you’ll find that with a little knowledge and discipline your money will go further than you ever imagined. Of course it is important to do your research and confide in financial experts along the way to ensure your money reaches its fullest potential. In the News & Insights section of their site, JSF Financial features several articles that address potential investment strategies.
It’s as simple as that. Applying the above information to your personal finances can help you to remain secure even when life isn’t so stable. No one can ever predict the future, but by employing proper practices now and continuing to monitor, save, and invest you will find that your future looks a whole lot brighter. If you’re having trouble in getting started, it is recommended that you consult with a financial advisor for suggestions, advice, and guidance.