If you’ve been working hard in your job to get a promotion or you’ve been working away at your own business, and now the hard work has paid off, and you’re finally making the money that you’ve been dreaming of – now what do you do? If you’ve been dreaming of it for a while then you’ll probably have a good idea of what you want to spend it on, in fact, you might even have a list of things you need and will have spent it in your head before you’ve even got it. But whether you’ve won the lottery, received an inheritance, have had a considerable pay rise or have more business than ever before, it’s fantastic that you’re doing well and you need to take some time to look at that, congratulate yourself on what you have achieved and reflect on it. Then you can get to the money bit…
Clear Your Debts
Getting rid of any debts you have is the first and foremost thing you should do when you can afford to. There’s no point leaving them there till later, get rid of your student debt, credit card debt to pay off that loan from your friend or family member. Do your sums and work out how much and how often you can make payments and while still paying for the essentials in life and make sure you are debt-free as soon as possible so that you can enjoy your money and start on a clean slate in the plus.
Understand Your Cashflow
It doesn’t matter how much you’ve got, millionaires still end up bankrupt after spending too much, and in fact, it could even be easier to overspend if you have a lot of money because you think it never ends and you think that you can do and buy whatever you want without managing your money. The opposite is true; you should be getting to know your cash flow, whether you’re earning just enough to get by or you have loads of money. There are taxes, retirement contributions, and insurance payments that need to come out of what comes in. If you’re managing these payments yourself, then you will have a better idea of how much they cost, however, if you have an employer or are working through an umbrella company, then these payments will likely come out of your wage before you even see it. To really get to know and understand what’s happening with the rest, download a money management app so that you have transparency of your accounts in the one place. It will enable you to manage what your spending far easier than you ever have before and make sure that nothing is wasted and you are managing your money the best way possible.
Once you fully understand what you are spending and what you need to be spending your money on and what you might be wasting your money on, then you can create a budget which you need to stick to. If there’s a debt to pay off, then at first it might feel like you’re restricting yourself, but inevitably once you stop frittering money away, you’ll soon have far more financial freedom than you’ve ever had before…and not just because you’re earning more.
Now you’ve got more money; it’s time to put some away and start saving. Have a look around for savings accounts which have good interest rates and ones you can access and put money into each month.
Invest Your Money
While putting your money away and letting it build up gradually is excellent, if you’re earning enough, then it’s also good to invest it. Investing your money will keep it safe and will help it to grow even quicker. If you’re not sure what to invest in, then educate yourself on investing in stocks, start-ups, property, gold, or bonds. Property is a really good one to get into and with so much information on it, you can learn pretty quick. Don’t just limit yourself to property in your area either; there are many opportunities to buy something abroad and make money such as a hdb for sale in Singapore, which could be a sound investment.
Keep An Emergency Pot
It is very wise to have some funds which you can dip into should any emergencies arise. No matter how much you are earning, expensive emergencies can still happen when you haven’t planned for them. Your car could break down in the month you plan on going on holiday, and your money has been put aside for that. Think ahead and be prepared.