How to be your money’s boss

Money is King and so many people are interested in investing. But, it’s hard to decide when you should start with investing. Here’s a guide help you manage your money.

The activity of managing your own money is known as personal finance. It is about how much you spend, save, borrow, and invest.

The way you manage your money is influenced by a variety of factors. Your personal finance plan is influenced by your age, education, ambition, family, and country of residency.

Personal finance is divided into stages.

It’s important to understand where you are right now because each step necessitates a different strategy.

Personal finance comprises four stages.

Phase One: Go from naught to something

This is when you are living paycheck to paycheck with no savings. I wouldn’t worry about anything else than having a financial buffer at this point. Simply save as much as you can. When you’re in this stage, it’s okay to be frugal. Your future self will thank you for it. However, you’re only getting started.

Phase 2: Gain traction in the second phase.

After you’ve saved at least one month’s worth of costs, aim for six months. You can relax more and spend more money on yourself during this time. However, never save less than 30% of your income during this phase. It’s critical to get to a comfortable cushion as soon as possible.

Step 3: Enjoy peace of mind in this phase

So you’ve saved enough money for at least six months’ worth of expenses. Put it in a savings account and don’t touch it for a while. Everything you save from now on will be invested.

Remember that you don’t need to consider about investing your money until you’ve covered your expenses for the next six months. Begin by dipping your toes into certain investments. When your net monthly financial growth is positive, you’re on your way to more financial freedom.

Phase 4: Gain financial freedom finally

You have enough cash and investments to support your living expenses at this point. If you start from nothing and work your way up, you can make great strides. When people are at ease, they tend to accept the status quo.

It’s not an awful spot. You have enough money to buy modest items or take vacations.

However, you must continue to work. There is nothing you need to do in phase 4. However, if you’re in Phases 1-3, your priority is to lay the groundwork for your personal finance foundation.

The way I look at it, you want to start with managing your money. You want to make sure you’re the boss of your money, not the other way around.

It’s never too late to start with investing! Don’t get lured in by certain opportunities. Remember, there have always been big winners in the market. And they will come again.

So take your time. Read the full personal finance guide here:

Personal Finance Guide: Manage Your Money Like A Boss

Source: How to be your money’s boss – Towards A Better Life

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