This is a collaborative post by Ellie Jo that discusses smart long-term financial decisions.
The Wisest Financial Long-Term Decisions You Can Make
If you want to try and gain control of your finances in as secure a manner as possible, there are plenty of ways of doing so which you might want to consider. As it happens, improving your finances is relatively simple so long as you follow some of those ideas, and it is never too late to begin doing so either. That being said, the sooner you do makes these kinds of positive changes, the better off you will be. In this article, we are going to pay particular attention to those decisions which are going to make the most significant difference to your life in the long-term. As long as you are taking on board some of the following, you won’t have to worry about your financial future for too much longer.
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Save 10%
One of the golden rules when it comes to money management is to attempt to save at least ten percent of your paycheck each month. If you can keep that much or more, you will be gradually developing a decent enough savings pot that you can either dip into when times get tough, or just know is there to fall back on should you ever need to. This feeling of security alone is worth it, but it will also ensure that you can eventually be able to afford some of life’s more significant purchases too. It’s hard ever to be able to buy a house, for instance, if you don’t ever save any money.
That’s all well and good, but you might reasonably be asking: how can I even go about making that happen? It can indeed seem difficult or downright impossible to save that much money, especially if you are in a bad situation or perhaps even in debt. While there is a school of thought that says that you should pay off debts before saving, there is another that says that you might as well try to do both at once. It ultimately depends on how much debt you have, but generally you should be able to do both at once, and that can be an excellent way to go regardless.
At the very least, you should think about putting something aside each month, even if – to begin with – it is only 5 or even 2 percent. Any saved cash is still saved cash, and it’s still a worthwhile and valuable long-term decision to put some money aside for a rainy day.
Learn To Invest
A lot of people harbor the unconscious notion that investment is not for everyone – or at least not for them. If you find yourself thinking this, I would like to invite you to reconsider. Actually, nothing is getting in the way of you investing your money wisely, except your own idea that you can’t. Even if you only have a little spare change to put towards some investment, you will find that you can find a way to invest it safely and securely. The biggest question here is of course what investment to go for, and that’s not an easy one to answer – in part because it depends on what you have a natural interest in, and what is unlikely to be up your alley. If you have a good head for figures and predictions, the stock market could be a viable option – and that is something you can do with any home computer or laptop these days. Alternatively, you might want to think about investing in something a little less common.
An excellent example of this is cryptocurrency investment. This is all the rage at the moment, and yet so many people do not really understand it still. In a sense, the good news is that you don’t need to understand the underpinnings and workings of a distributed public ledger like the technology behind a blockchain. Although, if you do read up on it a little, you might be able to earn a little more. However, just knowing that you can hold a little bitcoin and expect it to grow over the years is worth a go. This is good as long as you don’t invest any amount you can’t afford to lose.
Done right, investment is a critical tool in ensuring a more robust future financial foundation. But keep your cool, keep your head, and keep hold of anything that you need in the bank right now.
Life Insurance
It’s easy to think that these long-term decisions are all about you. Actually, a huge part of thinking about the future in financial terms is also ensuring that you take into consideration those around you. Preparing your loved ones for a time when you might not be here is not only one of the wisest things you can do, but one of the most compassionate as well. In addition, it’s definitely worth thinking about if you want to ensure that they can carry on financially once you are gone. Obviously, for most people, this means finding decent life insurance policies, which involves looking through term life insurance companies and comparing their policies in detail and at length. Do that, and you are on your way to preparing your family financially for the future in a much stronger way, which is definitely something to be proud of.
Five Year Plan
Even if the idea of a five-year plan is something of a cliche, that is only because it’s such a popular idea – and that is merely because it is such a good idea. If you don’t currently have a five-year plan for your finances, you should absolutely think about starting one. Not because you can expect things to go entirely to plan, but because having that plan will enable you to feel much more in control of your finances at all times. Do that, and you will ensure a stronger financial future for yourself and those around you. Then, without too much trouble, despite what hand you may be dealt, can have a more secure financial future.
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