No matter how old you are or how much you have in the bank, we can all stand to do a healthy self-assessment of our personal finances. We all want to be successful. We all want to retire early and with more than enough. We don’t want to have to worry about money!
Our money is one thing. Personal finance? That’s another. That’s the strategies and principles that manage and guide our money. And the questions is this: are yours up to snuff? We might know what we’re supposed to do. You can have all the right answers. Spend less, save more. Invest. Budget. Cut up your credit cards.
But honestly, how well do you listen to what you know? Do you put that personal finance wisdom into practice in your daily life? Maybe you had a New Year’s resolution about your budget...and maybe it’s not working out so well.
Whether you’ve fallen off the wagon and need to course-correct or just want to assure yourself that you’re headed in the right direction,
these are a few guiding principles of personal finance to help you make way for a secure financial future!
5 Personal Finance Principles for Investors
Budget...and Stick to It
Budgets. No one likes making them, but it sure feels good to have one that you can stick to. Budgets mean that you know exactly where all of your money is going. You know what goes in and what goes out. Of course, the key to budgets is sticking to them. Budgets are not designed to wiggle. They’re not designed to be made after you spend. When you make your budget, make it work for what you want for yourself, not to do damage control for your bad financial decisions.
Your budget is there to help you. So let it help you.
Track Your Spending
While there are automated ways to track your spending through apps and bank statements, it will be much more beneficial for you in meeting your financial goals if you start physically writing down your spending. Why? It makes you conscious of the money going out. It’s so easy to swipe that debit card and forget about it.
When we don’t see the money and especially when we don’t see it in one place, it’s so easily to let it all add up.
Dedicate Yourself to Saving
No matter what your budget is, no matter what your expenses are, make a commitment to save. It doesn’t have to be a lot. But save something. The only way you’ll gain momentum in your finances is if you are saving. So save. Even if you have to sacrifice to save, do it anyway!
Make Your Money Work
Invest! The person who is investing versus the person who isn’t is going to have hundreds of thousands of dollars (if not more) come retirement than the person who lets their money sit in a bank account. One of the best things you can do for your financial future is invest.
If you don’t know where to start or what to invest in, we can help you with that. Investing in real estate doesn’t have to be this big, complicated, intimidating thing. Our experts can help you get started with investing in turnkey real estate. You can start earning passive income today!
Don’t Fear Risk
Our natural instinct is to avoid risk. We don’t want to lose, we don’t want to get hurt, we don’t want to damage what we’ve already built up. It’s totally understandable. But when it comes to financial strategy, one thing we’ve got to understand is the value in embracing risk. It’s not about diving in recklessly. It’s about taking on necessary risks in order to grow and expand your finances. Risk is always going to be present when it comes to investments—and with any decision you make financially, whether it’s giving in to impulse or buying a rental property.
What you have to focus on is doing your due diligence: carefully assessing risk and reward, running all of the numbers, inspecting all of the angles, and weighing all of the information so that you can make a wise, informed decision.
Looking for more advice from experience? Check out Kent Clothier's Experience Matters podcast!