Debt is at record levels, and while money is not inherently wrong, it can be used to your detriment. The lure of desirable items, social pressure, and the soaring cost of living can make finance management unbearable. Yet, there are effective ways to alter your mindset for financial independence with some complex yet effective lifestyle changes.
Long-Term Calculated Risk vs. Saving
Making investments is a rewarding method of making money. Yet, it comes with a certain amount of risk. However, it differs from gambling in that you or a broker can make calculated decisions about where you put your money. Popular 2021 investments include Forex trading, stock purchases, and cryptocurrencies.
You might want to consider saving your money to avoid risk. Any cash you might otherwise invest could be set aside in a savings account. Purchase only what you require, such as food and clothing, then save the rest. You may not make extra money as you would by investing, but there is no chance of loss. Both are excellent long-term solutions.
Shedding Your Debts
As of 2021, in the UK alone, the average personal debt is over £30,000. This is an astronomical amount that many find paying off almost impossible. Most debt is accumulated via credit card expenses, designed to keep you in a state of perpetual debt. You can quickly pay off your debts with a few tips:
Budget Yourself
This one of the most challenging things to do yet is perhaps the most powerful. First, list your income against expenditure to see what you can and cannot afford. Then, budget yourself according to the disposable cash you have (if any) and do not exceed available funds – ever!
Cancel Services You Don’t Use
You probably have a few things you don’t use. This could be a gym membership or a Netflix subscription, for example. These are desirable items to have, yet they aren’t needed. You can work out at home, and most Netflix shows eventually make their way to free channels.
Pay as Much Credit as You Can
Through budgeting, you will see where your debt payments need to go. Much of this is probably credit card payments. Your debt will not decrease by paying the minimum, so spend as much as you can towards credit card bills to reduce overall debt.
Stop Using Credit Cards
You might be tempted to buy things you want using credit cards. But this is how you got into debt in the first place. Ditch the carbs and use cash. If you don’t have the money, then you cannot buy something.
Sell Things You Don’t Need
The average US home has over 300,000 items. Imagine you could sell each item for $1. That’s a lot of money. Therefore, it might be helpful to take an inventory list and sell any items you don’t actually use or need. Then, put the money towards debts and not a holiday.
Embracing the Spirit of Giving
It is debated whether it’s a metaphysical or statistical anomaly, yet the act of giving causes wealth. Not metaphorical or social wealth, but also more financial income. Studies have shown that you can enrich yourself by donating time and money.
The reasons vary, but some of the most observed include
- Promotions: by your boss or getting a new job when you have been witnessed giving.
- Psychological changes: giving makes you feel good and increases productivity.
- Linked charity and GDP levels: the amounts given an increase with GDP and vice versa. This means better pay and job opportunities.
All of these are complex social and economic factors currently being studied. Yet numerous studies have shown that you can become rich in all aspects of life when you help your fellow human.
This is a contributed post.