Society’s relationship with money has evolved over the decades and resulted in trillions of dollars of debt globally. Although the national debt continues to grow, more people are learning to gain a new perspective on their money and acquire old fashioned finance habits that were practiced by their elders.
Just as rainy days are unavoidable, emergencies or repairs will also be needed at one time or another. It’s important to plan ahead with an emergency fund that can be used when an unexpected expense occurs. Between car repairs to hospital bills, rainy day funds help to ease the cost and strain on finances. Save at least $1,000 for the fund and build it up again when it is used.
2. Pay with Cash
Most people are prone to spend more when using a debit or credit card because using plastic does not involve as much emotion during the transaction. When using cash, it’s easier to become aware of the financial loss, which results in spending less. A McDonald’s focus group even discovered that most people spent up to 42 percent more when using plastic instead of cash. Carry cash at all times and separate it into envelopes for each expense to prevent spending more than you budget.
3. Shop for Bargains
Whether purchasing a foreclosed home or buying used appliances, making a lifestyle out of getting discounts on common items will work to build your personal wealth over time. You can still own the same type of products at the same quality, but can save a fraction of the cost by doing a bit of homework beforehand.
4. Avoid Debt
Society has taught us that in order to prove that we’re responsible with out money, we must first acquire debt. Although this can often be unavoidable when it comes to building credit, debt should generally be avoided when it comes to purchasing a vehicle or when buying gifts around the holidays. By avoiding debt, it will mean money saved without the interest fees. Instead of making impulse purchases, save for big ticket items, which will also result in valuing the item more and working to maintain it at a higher degree.
5. Set Financial Goals
Setting financial goals for the future is crucial to staying on track with your money and growing your personal wealth over time. Eleanor Roosevelt stated, “It takes as much energy to wish as it does to plan,” proving that you might as well map out your finances to attain success. Whether it means purchasing a house in five years or retiring in your 60s, your financial dreams are much more attainable when establishing concrete goals. It’s crucial to first establish goals with paying off any debt you may have acquired, and then plan on building savings, investing in Roth IRAs, and saving for your children’s college funds.