The earlier you start great financial habits, the easier your life will become over time. It is hard to make money and stay out of debt. But, when you realize that as a debt snowball happens quickly, a change of financial habits can create a money snowball.
This happens when you understand the power of a budget pared with saving money and investing in dividend stocks and mutual funds.
There are many types of investments, but here I speak of simple investments that are low risk, low cost and low stress. Once you become more experienced with investing you can study investments that are a bit more complicated.
The major concern at this point is to start great financial habits that concentrate on budgeting and simple investments. At the core of budgeting is to also to learn and practice emergency money skills.
A Change in Financial Habits Can Go From A Debt Snowball to a Money Snowball -Lois
1.How to Get Out of Debt, Save Money with Simple Investments and Budget
Ask your parents or grandparents and they will tell you life happens fast, really fast. Two years becomes ten years, in to twenty years and then thirty. it seems like it all happens in the blink of an eye.
So, if you concentrate, you can get out of debt now, save money, budget and invest. In ten years, twenty years and thirty you will be set financially.
Instead of compounded debt, no savings, a sideways budget and nothing invested, you will have a peaceful financial life.
Because, now you have compounded interest on savings and investing through your dividend stocks and mutual fund investments. Your budget keeps you in top notch financial shape.
These are simple investments, so they are easy to learn, easy to maintain and monitor on your own.
2. It is hard to make money and harder to keep it–stay cautious. That is why budgeting is essential
No matter what you do, it is hard to make money. You have to know the right field to go into, how to get into it with low cost, and how to stay in it.
This takes help and mentoring, so don’t be shy; get involved by asking experienced people in the field for help. Start with those you already know.
You have to understand how to write the right resume and research companies best for you and your career. Then you must know who to trust to show you the right way to navigate your field.
There are good people to look up to and emulate in a business, and those you should avoid. This is one quality that makes successful people successful. Approach people carefully.
3. Money doesn’t grow on trees, so stop acting like it does. It will with Simple Investments
The saddest statement I hear unsuccessful people say is, “if only I believed mentors when they told me it may not last”. In this case, my example wage-earner (a female), made a lot of money.
Because there was so much, and sometimes so fast, she thought she was set for life. She felt there would never be a worry about time or money, because it’s happening now, and it will always happen.
Then time started to creep up on the her and she realized there are no guarantees, but it was too late. Just because she once worked for a great company with a great boss, she didn’t understand things can change quickly.
Now, her next company demands more time, more energy and pays less money per hour. All she can think about is the good ole days her only thought was “money grows on trees”.
Fast forward to now, she got a rude awakening seeing that money doesn’t not grow on trees”. Her mentor told her, don’t give up, keep thinking forward, things will get better.
4. No matter how much money you make you can lose it all overnight
You see the stories of the once wealthy entertainers with mansions and several Mercedes. Then, there are the athletes with beautiful houses on the beach. Entertainers and athletes are not the only ones. But also big business owners or the businessman CEO who lived lavish lifestyles, also once wealthy.
Fast forward a few years, the contracts have dried up, the business went under, and the CEO fell out of favor with the board. All of these previously successful people went from seemingly wealthy to poverty overnight.
Losing their income, their lifestyle and the home and cars that came with it. It happened to them, and it can happen to you.
Therefore, when you make good money, it is important to understand you can lose it overnight too. Live a frugal life, put money away, buy homes and cars the smart way.
Save money, and remember that a debt snowball can happen quickly, but also a low debt money snowball can happen quickly, when you save money and budget the right way.
5. Money grows in simple investments such as mutual funds and dividend stocks over time.
Understand how money works in investments to get the best results. Mutual funds pay compounded interest and high asset stocks can pay dividends as they grow. If you add money to a mutual fund on a regular basis, called dollar cost averaging, you will make even more money.
Passbook savings accounts pay simple interest, but they have a purpose too. Some folks won’t use passbook savings account, but one good use is, they can keep money for other purposes to be used later.
Even your coin and dollar jar has a function for immediate small emergencies.
Understand How Money Works In Investments for Best Results -Lois
6. Your emergency money can be kept safely in a passbook savings account.
It’s important to be able to borrow from yourself if you have an emergency so you won’t have to go to the bank and take out a loan. Taking out a loan for an emergency creates another emergency.
It’s even worse when you have to ask others to borrow money. Borrowed money makes for broken relationships in many cases. Borrowed money should be limited to those who are close to you and vice versa.
When the debt snowball of money borrowing starts, you can get backed into a wall with your finances. This does not have to happen if you just take a small portion of your monthly earnings and put them away for a rainy day.
Get savings auto deducted and pretend the money does not belong to you – that will make it easy.
7. Your emergency money is for your emergency, not your friends and not your family.
A big problem some people have is they don’t keep their personal business to themselves. When you don’t, you have a tendency to brag about things no one else should know about.
Be proud of yourself for your financial accomplishments, like building an emergency fund, creating a great budget and learning simple investments. But, keep it to yourself, people will not ask to borrow money they don’t know you have.
This way, you do not run the risk of not having needed emergency funds because you loaned them to someone who did not repay you.
8. Constantly Improve your knowledge, your skills, and your Income.
Grab every chance you can to increase knowledge in your field. Read books, talk to mentors, take classes offered by your employer, and attend conferences.
The more you know the more of a valuable employee or business owner, you become. As you become more valuable, you can rightfully ask for more money or create more income.
Things are constantly getting more expensive, so if you have the right employer or small business practices, your income should keep rising from year to year.
9. There are very few people you can trust, especially with your money and finance.
There is no law saying you have to trust anyone with anything you own, anything you do, or what you invest in.
Educate yourself, do lots of research and know your options, when it comes to everything. Do not put your life on autopilot and do things because they seem good or someone else does it.
Understand money and finance, as though your life depends on it, because it does.
There are very few people you can trust with your money, even professionals. You need to know what investments are available and right for you. If your company has a 401k plan, it’s a good idea to invest in it, understand it, and know your options.
If you want to start a supplemental retirement plan, understand the best investments that are right for you also. So, if you choose an investment advisor you will know what they are doing with your money.
And understand when they are on the right path for you, they don’t always work for your benefit.
Great Financial Habits In Summary
Budgeting, saving money and simple investing seems easy. But, believe me if it were more people would do it, so I am here to help you. It is hard to make money and hard to keep money, some wealthy people lose all of their money overnight.
Starting with this knowledge will help you to be careful and stay safe. Instead of building a debt snowball, understand that when you do things right it is just as easy to build a money snowball.
This happens when you use budgeting, and then onto investing in dividend stocks and mutual funds skills as a way to build wealth.
Your investments should be low cost and low risk as you are learning and growing in knowledge. It is all a matter of habit, starting great financial habits early, will make creating great finances easy.
Emergency accounts seem simple so it is easy to put it off until you have an emergency and you realize you could have been prepared. Do not wait; do it now. The peace of mind you will get with an emergency fund is phenomenal. Keep learning, keep building and keep moving up the pay scale, no matter what you do.
Budgeting Planning to Avoid Financial Disasters
The First Step of Budget Planning to Avoid Financial Disasters
Budget planning to avoid financial disasters starts with not buying too big with the big stuff such as cars and homes is one of the biggest reasons many cannot withstand a small business or personal financial disaster.
Many of us forget that there are affordable ways to buy homes and cars to avoid future financial disasters. What happens, is that these two items are based on way too much emotional buying. Keep your head on straight by researching before you purchase. Learn more on my instagram.
Ask questions like; Do I really need a new car? What will the warranty maintenance cost on my new car? What if I purchase the same car 3-4 years old, what would the savings be?
If you have a job, no matter how secure you think you are, that security could be in jeopardy at any time. So, purchasing a car that you can buy cash or with very low payments will be the better option.
The same holds true with a home, if it is too large, with a stressful payment, the smaller home with the lower payment, that carries less stress may be a better option.
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Stay Properly Insured
The second step to budget planning to avoid financial disasters seems to be plain old common sense. But, sometimes people with a home and car let important insurances lapse due to illness or thinking they don’t have the time, they let important insurance lapse, due to simple negligence.
Stay fully insured with a car, home, health, life, and if you own a business – all applicable business insurance. A small business lawsuit should always be covered with business liability insurance, not your personal assets – so, don’t take the chance.
Don’t Waste When Times are Good and Income is High
We have had many economic downturns and upturns in the past several decades. The one regret I have heard a lot when I talk to people who make a lot of money when times are good is — “I lost my mind when I had a lot of money, and spent without regard to the reality to the future, then a financial disaster came”.
Because nothing is guaranteed, even good times, it is important to handle your money as if the money will stop anytime, that will help protect your assets.
Let Your Kids know Money Doesn’t Grow on Trees
There are some parents who, despite much evidence to the contrary, feel it is important their kids need to have all the material trapping they did not have. It is not necessary, and it is not true.
Your kids will literally begin to think that money grows on trees and drops from the sky. Your kids know you love them when you give them positive time and attention, so it is not necessary to spoil them, and it may lead to a financial disaster.
You can reward them without giving them too much, some parents to the tune of going bankrupt. At this point your kids probably are not aware of potential financial disasters, but at least you can start to teach them money skills.
Have a Sick Fund for Days Not Covered by Extended Illness
Most jobs have sick leave, most small businesses have no sick leave unless they create it themselves. As an employee, you may run out of sick leave if you have an extended illness. Save money in a sick fund to cover an extended illness. This is especially important for small business owners.
Make Your Savings a Bill
Create a general savings fund and treat it like a bill. You are probably seeing a pattern here. Saving money as several bills is just as important as paying existing bills. It should be a part of a general budget plan for financial disasters.
Don’t Borrow From Your 401k, Borrow From Your General Savings
As far as I am concerned, borrowing from a 401k is a budget planning financial disaster unless you are suffering from a fatal illness, borrowing from your 401k should not be a consideration.
You should have an automatic saving account for financial disasters that you can borrow from.
The 7 steps of budget planning to avoid financial disasters will above will get you on the way to solid financial success.
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Lois Center-Shabazz| Money Strategist | Course Delta Agency
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At MsFinancialSavvy.com, we are occasionally asked the question, “Why a financial website targeted to women?” The following article will attempt to explain our website.
>Women are three times more likely than men to be single parents, or early widows.
>Women are more likely to transfer budgeting and saving habits to their children.
>Single mothers today are still more likely to live in poverty than single dads.
>The percentage of men who invest is much greater than women who invest.
Why Focus on Budgeting and Investing?
> Women need to know how to budget and invest for emergencies, savings, college planning and retirement.
>Women need to know how to keep the money they earn, and increase their net worth, through budgeting and investing.
>There is a significant number of women who make high incomes but do not have enough money to pay monthly bills or to invest. The main culprit, is lack of budgeting skills.
>Woman need to know the field of budgeting and investing, so they can pass it along to their children.
Why invest rather than just save in a less than 1%, simple interest, bank account?
> In order to keep up with, and stay ahead of inflation and taxes, history shows that investing in stocks long-term has given us the greatest returns.
>Our website MsFinancialSavvy.com is important because many women have retirement accounts with their employer, but do not understand the investments in those accounts. Learning and using MsFinancialSavvy.com may enable you to understand the importance of funding your 401k and 403b employer retirement accounts. It will also enable you to choose the appropriate investment, when given a choice.
>Many women are self-employed, homemaker moms, or have a job that does not provide a retirement account. Since retirement planning is a mystery to these women, they choose not to fund a retirement account.
>Many women are not familiar with college savings plans.
>Woman need to know that saving with stocks and mutual funds, you can acquire compounded interest vs. the banks low simple interest rate.
>If women choose to use a broker to invest, understanding investments will increase chances that they are purchasing investments that are appropriate for them.
>In order to purchase stocks and mutual funds for an Online Investment Account, women must understand the stock market first.
Use MsFinancialSavvy.com to learn to budget and invest money now! If you are already familiar with stocks and mutual funds you can use our tutorials for a review. Use our stock quotes and charts, financial calculators, feature articles, book reviews, and investment bookstore, whether you are a beginning, intermediate, or advanced investor.
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