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5 ways to be smarter about your money in 2021
Start the new year on a high note by stepping away from bad financial habits.
5 ways to be smarter about your money in 2021
Start the new year on a high note by stepping away from bad financial habits.
If your finances are a mess, maybe it’s time to consider hacking them back in shape.
Speaking to nestegg, Wealth Within chief analyst Dale Gillham said that it’s easy to fall into the same old traps when it comes to managing your money.
Fortunately, the start of the new year can be a rich opportunity to break bad habits when it comes to your financial wellbeing.
His first tip? Pay yourself first.
“We work hard for our money, so why do we fall into the trap of paying everyone else first and then live off what is left in our bank account. Managing money this way means you are putting yourself last and living the cycle of the broke where you go from pay to pay,” he said.
To break free of this cycle, Mr Gillham recommended placing at least 10 per cent of any money you earn straight into your savings before paying any bills or other expenses.
His second tip is to make spending less than you earn a habit rather than a happenstance.
“After you have paid yourself, your aim is to end the week with money left in your bank account, if you do that, then you can move that extra into your savings so it can compound faster,” he explained.
Now that you’ve gotten the hang of being smarter about saving money, Mr Gillham recommended consumers begin to think about investing.
Regardless of whether you choose to stock up on a wide range of different shares or a handful, Mr Gillham said that the more valuable thing is that you’re building your portfolio at all.
“It is not how much you start with that is important, rather it is important you start,” he said.
Once you’re regularly saving and investing, Mr Gillham recommended cracking down on credit cards and other debts.
Even if they seem like manageable expenses month-to-month, they can hold you back when it comes to saving and investing over the long term.
Mr Gillham’s final tip is to remain vigilant of loyalty taxes.
“Hack number five is to shop around for better deals on all of your regular expenses, the money you save is better off in your investment account. The more you put into this account, the quicker you will become financially independent,” he explained.
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