Did you know that one-third of Generation Y plan to retire between the ages of 31-40? But truth is not many will actually be able to, unless they take some serious steps towards doing so.
If you want to achieve this, chances are you’ll need some serious money management tips to get there. These tips will help you improve your daily decisions about money and build solid financial habits.
Toss the credit
You’ve heard it before but it needs repeating. Credit cards need to go!
Study after study is proving that even if you pay credit cards off monthly, then using one actually turns you into a different shopper, one that is less price sensitive, more impulsive and more extravagant.
Clear personal debt
If you really want to get ahead you need to get real.
Sit down, work out how much you owe and create a plan to clear it fast.
Yes, this will mean making some short-term sacrifices, being disciplined and a little hard work but if it were easy everyone would be sitting on a lovely little nest egg.
Prepare a spending plan
A spending plan not only helps you spend less than you earn but it will highlight your problem areas and give you a structure to follow to improve on them.
As Trent Hamm says, it’s like using training wheels – it’s not an absolute solution to your financial situation but a step toward being able to effectively and naturally spend less than you earn.
Build in a buffer
Whether you’re employed or about to venture into your own setup, having a contingency plan for the unexpected is crucial.
A setback such as a job loss or decrease in income can create a huge amount of pressure to make ends meet without a back-up.
Although the amount needed will vary from person to person, putting aside 3 months worth of income is a great goal, especially for those about to embark on a new business start up.
Set money goals that inspire
Setting financial goals that fire you up will drive your passion to achieve them.
When things get tricky, a goal like pay down debt is hardly the “hell yeah” you might get from one that’s driven by your core values.
If becoming debt free means pursuing a dream of self employment, then that should be the goal and paying off debt the road map to achieving it, not the other way around.
Maximise your earning potential
Whether you’re running your own show or part of a larger group of talented individuals, there are many ways you can enhance your income capacity.
Continue your education to increase your expertise in your field, or find a mentor who will guide and motivate you towards your best working self.
It’s not just about seeking a raise, it’s about creating new opportunities.
This is important. You wouldn’t drive a car without insurance and it’s no different when it comes to your health, income and life.
Just like the importance of a financial buffer, putting strategies in place to protect you and your family from an unexpected illness, injury or loss of income is non negotiable.
Whether it’s life insurance you’ve been putting off or landlord’s protection you need to look at, the sooner you’re covered the better you will sleep at night knowing you’ve put all the necessary structures in place.