Your mentor can be anyone – it can be your mom or dad or even your sibling who has skills to smartly manage money. Financial management is an art, but you can learn it. Unfortunately, there are not many people who are ace at money management.
If you are also one of them, do away with your worries because approaching a mentor can undoubtedly help you get on the financial track. When you consult your mentor, you will have to explain your financial condition to them, so they can analyse where you currently stand, what your goals are and how you can fill the gap.
However, there are basic rules that apply to everyone. In order to take control over your finances, you do not need to actually consult a mentor because the advice is more or less going to be the same as below. This blog tells how you can get a better control over your finances.
Wait before you buy
There are many things that you may want to buy. It can be anything and most of them they are not very urgent. Just because you have some money in your account, so you do not wait to spend it. A rule of thumb says that you should wait for a couple of days to make sure that you want to buy it.
This is a great strategy to stop impulse buying. Sometimes you go to the market and come across a thing that you find very interesting, you become tempted to buy it. This temptation can cause wreak havoc on your budget.
To overwhelm this temptation, the best thing is to put off your purchase. It is not surprising that the thing you are hankering for now may fall out of your approval after a couple of days. Wait for at least a week before buying it. Add to your wish list. You may forget about it after some days. If it is still at the back of your mind, you should buy it.
Set saving goals
When it comes to setting saving goals, you often decide to set aside a fixed percentage of your money every month. This is not how you can achieve your saving goals. Putting aside a foxed portion of your money is one thing and doing it for a specific purpose is another.
You need to save money for various reasons. For instance, you may need it to fund your unexpected expenses or you need to build a retirement fund. Just stashing away 10% of your income, for instance, cannot help you achieve your goal.
Set your goals – mortgage deposit, car down payment, retirement funds, and emergency cushion. Analyse how much money you have in total to contribute to each of the categories. Look over your previous bank statements to check how much money you normally need for your regular expenses.
Use the rest of the money for one or all of these categories. This can prevent you from turning to lenders for funding your needs all the time. However, it does not mean that you will never need to borrow money.
Start saving as soon as possible
Do not delay saving money for your future goals. There are some long-term goals that you do not bother to save about now. For instance, you know that you need to buy a house and car at one point in your life, but you start saving for these goals in your 30s.
Do not wait for such a long time. It seems easy to arrange the down payment in less time, but it is not that possible. Therefore, you should start saving for these goals as soon as possible. Try to do it in your 20s. It should not be delayed further when you turn 25.
However, make sure that you do not compromise with your emergency cushion to save for such long-term goals because this will help you tide over during financial emergencies. However, if you still face some cash shortage, you can seek guaranteed loan approval from direct lenders.
Future earnings should not be a basis for a financial advice
One of the biggest mistakes that takes a toll on your finances is you rely on your future income to meet your expenses. For instance, you want to buy a laptop, you use your credit card in the hope of getting paid from your client.
What if your client does not pay you? Of course, you will fail to pay off your credit card debt. As a result, you will be imposed late payment fees and note that the interest rate is generally higher for credit card debt than any other short-term loan.
It can quickly add up and eventually you will fall into debt. A rule of thumb says that you should treat cash your own that is in your hand. You cannot make any purchase based on the income you have yet to realise.
If you live on your monthly income, you will be able to better control of your spending. This will not only prevent you from overspending but it will also help you save money for a rainy day.
If you are looking to take control of your finances and do not know what you can do for it, you should follow the advice mentioned above. You can also consult a mentor who has been expert at money management and you will notice that they also give this sort of advice.