How have you been addressing your financial worries in the past years? What is your strategy for this year? How are you going to worry less and focus on what you should do more?
We know, see and feel the impact of unmanaged finances. We worry. We get stressed. We get disturbed. Our work is affected. Our health is affected. Our relationships are affected. While money is not the most important thing in life, it affects the important things in life. It is then essential that we manage our finances well.
Let me share with you three simple ways:
One, raise your income by increasing your performance and increasing your income streams.
To increase your performance means you give your best at work. Don’t wait for higher positions before you do more. Do more and higher positions will come. In other words, go for high performance. With high performance comes enhanced competencies and developed character. And here’s the bonus: it comes with increased income (in the forms of bonuses and salary raise).
To increase your income stream means adding an income source other than what you have now. If you are an employee, why not start something on the side. Yes, give your best while you are at work. When you go home or during your day off, maybe you can do something else. Start a side business. Sell something of value. Offer your services to others.
Two, reduce your expenses by striking down your luxuries or vices and stopping your loans. Pouring liters of water into a jar that is leaking will never fill it. In the same way, increasing your income will be useless if you keep increasing your expenses as well. Much worse, if the increase in your expenses is even higher than the increase in your income.
So, strike down your luxuries/vices and stop your loans. In the page/link I will be sharing at the end of this article, you will see a table that will show how you are wasting millions in every extra peso you spend on extra.
Also, stop borrowing. The Bible says, “The borrower is a slave to the lender.” You will be eaten alive by your loan interests. It could be from loan sharks or credit cards. Be careful. Don’t be a serial borrower. Even if there is what we call a good debt (vs a bad debt), my wise financial mentor would advise you not to borrow even for business. Of course, much worse if it is a consumer debt.
Three, revitalize your position by starting to save, getting protection, and riding investment vehicles.
Start saving a portion of your income. Before you even withdraw your salary, set aside your saving already. Say, 20% of which. For instance, if your net pay is P20,000, set aside P4,000 already. Save up for emergency fund which is an amount equal to 3-6 months of your expenses. You may put this in another savings account.
Get protection by getting yourself an insurance. Insurance is something that most people need but they don’t get it because they do not understand it. Here are the purposes of insurance: It is for emergency protection in case something bad happens (for example: hospitalization, accident, death); It can serve as an interim source of fund for the family while they are recovering from a huge expenditure and/or loss of someone; and It is an added future fund (for health, education or retirement). (For your insurance needs, text 09997180444.)
Ride investment vehicles by making your money work for you the right way. My mentor says, “There are vehicles available but many people are only walking to their wealth.” As a result, the wealth becomes an elusive dream. So start riding these vehicles by investing in the following:  Real Estate. You can buy land or property and you can earn through its rise in value or from rentals.  Business. You can put your money in an earning business. You will earn from its profits.  Stocks. You buy shares of ownership of big companies. As the business grows, your money also grows (called capital appreciation). You can also earn through dividends when they distribute portion of their earnings to the stockholders (and you are a stockholder so you receive your share).  Mutual Funds. Instead of you buying shares of stocks directly, you buy shares in funds. Fund managers will then invest the pooled funds (from you and other investors) in good stocks of their choice. They will manage it. As the fund value grows, your money also grows. (You can start investing in stocks and mutual funds with P5,000 only. You don’t need millions to start.)
Again, these are simple strategies you can use to address your financial worries. Earn more. Spend less. Cut your luxuries, vices and borrowings. Save up. Get insurance. Invest more.
Remember: You have worked hard to earn your money. Don’t just let it slip away. Now, go and live with less financial worries. For a lengthy discussion of these concepts, visit https://goo.gl/UUGM1a.
(Chris Dao-anis is an author, trainer and speaker who aspires to help you become a better you – that includes your team or your audience. He shares about leadership, communication, public speaking, productivity and personal finance. Invite him to speak or train by emailing him at firstname.lastname@example.org. Visit www.chrisdaoanis.com for more details. )