A guide to sorting out your financial mess
SEE ALSO :How to recover after a financial mess3. NUMBER ONE RULE FOR DUMMIES You can’t save your way to prosperity. Saving is not only great, but is in fact something that you should be doing consistently, to cushion you in case of an unexpected rainy day. But that is all it does - cushion you. Even savings get depleted if the unforeseen situation goes on long enough and it will certainly not make you wealthy. What can make you wealthy, however, is putting your extra money in a venture where it will multiply. But where to begin? A few investments that anyone can make where returns are almost guaranteed include real estate, government bonds and mutual funds. You can then graduate to slightly riskier ventures like the stock market, forex trading and so forth. 4. WAIT UNTIL YOU CAN AFFORD IT Sometimes you believe you can afford something, but can you? Really? You may have the money for it right now, but if buying it leaves you with little else to invest, then you really cannot afford it. Worse still, is when you do not have the money but have to borrow to fund it. That is a great way to forever be stuck in a vicious cycle of debt. Differentiate between needs and wants and only spend on a ‘want’ when you can genuinely afford it. If it is not a need, meaning it is not necessary for your survival, then it is a want, something you desire for your comfort. And for needs, try to find the version of it that you can afford. Especially avoid credit card debt, one of the worst kinds of debt you can possibly accrue. It can easily keep accruing with various other charges such as late payments keeping you in an endless cycle of debt. Some debts are good, but only when they are well-thought through for investment, meaning they will bring you greater returns when the investment matures. 5. EDUCATE YOURSELF There are intricacies about money that only a few people ever understand. This is because most are focused on survival, earning and spending; the reason why only a few are able to make money grow and aren’t in the rat race. The one thing that almost every wealthy person has in common is that they read a lot. Bill Gates, for instance, reads a book per week. There are many great financial books such as Money Master the Game: 7 Simple Steps to Financial Freedom, by Tony Robbins; The Millionaire Next Door By Thomas J Stanley and William D Danko and The $100 Startup By Chris Guillebeau. In addition, anyone with access to the internet can teach themselves how to become better with money, thus get more of it. There are numerous free resources online such as Investopedia.com, mint.com, thesimpledollar.com, the apps Abacus and Wallet, among numerous others.