Have you started writing your New Year’s resolutions yet?
What are some essential money lessons you’ve learned this year?
This year’s financial mistakes can become next year’s achievements. Don’t be afraid to make an honest review of your financial roller coaster experience year. It will make it easier for you to figure out what to improve in 2017.
Let’s take a look at 7 essential money lessons you’ll need in 2018 to achieve financial freedom.
1. Your spending reveals your life values
Show me your bank statements and I’ll tell you your life values.
The truth is, we always seem to find money for things we want or need. Most of the time, we do it at the expense of other things we claim aren’t a priority or can’t afford.
Following this rationale, the problem isn’t the amount of money coming in, but your priorities.
Benjamin Franklin’s warns us to, “Beware of little expenses; a small leak will sink a great ship”.
Hazardous spending habits can be dangerous. It’s important to learn how to control impulsive spending tendencies before they control you. Because they definitely will!
Read this article to find out how Money Habits Can Make Or Break Your Wealth.
2. Identifying the right problem can solve half your issue
Many people put too much emphasis on saving and not enough on earning.
Clichés like, “it’s all about what you save, not what you earn,” are just… cliches.
As long as your income stays the same, it doesn’t matter how amazing you are at saving; your savings will get stuck. So focus on boosting your income in order to increase your savings.
Tip: Your income decides how much money you can save.
Do you know what your savings need?
A gap. A huge gap between your monthly income and your spendings.
How can you reach this gap?
By increasing your earnings while decreasing your spendings. The best thing you can do with it is to invest it. From this point on, it will continue to increase on its own.
You’ll know you’ve achieved your ultimate goal when your gap will be making its own money.
3. Avoid buying into the idea that “money doesn’t matter”
Money does matter! Why else would you be spending about one-third of your life trying to earn it?
I think most people who claim to believe money doesn’t matter, believe, in fact, that buying useless, expensive things isn’t going to help them find meaning in life. That’s true.
But do you know what money can help you buy? Opportunities. These will help you achieve your freedom. And on the land of financial freedom, your decisions will be the ones making a difference.
So choose wisely!
4. Time is money… or is it?
Which one is more valuable to you?
Spoiler alert: Your time is priceless!
Nowadays, time is one of the most precious assets you can have. Throughout your life, you will surely learn to appreciate its true value.
You can’t take back a wasted day. But you can earn your money back. In fact, you can earn as much money as you want. The secret is knowing when to stop and say, “enough is enough”.
Wise tip: Make it your goal to spend your money buying back your time. Your life will become more fulfilling. Just try it!
Make it your goal to spend your money buying back your time. Your life will become more fulfilling. Just try it!
You might also be interested in: Time vs Money. What Would You Rather Donate?
5. Increase your savings without your wallet noticing. How?
By using the 1% method. It works like this:
- Save 1% of your monthly income. For example, if your income this month is $2,000, you will be saving $20.
- Next month, increase your saving rate with 1%. Continue adding 1% to your monthly saving rate until you reach an amount that is comfortable for you.
If you decide to try out this 1% saving method, by the end of next year you’ll have a pretty penny tucked safely in your bank account.
Not all of us can afford to save 50% of our income. So, instead of giving up on saving altogether, start with a 1% baby step. A little will always add up to a lot, you’ll see.
6. Sabbaticals are not to be dismissed. Give them a serious try!
Accomplished people like Mark Zuckerberg and Warren Buffet have incorporated these work/rest sprints into their lifestyle. There’s no doubt it works.
It works like this, after an intense work season, take a sabbatical, a mini-retirement. Your mind and body need an efficient work-rest balance in order to be productive and grant you high levels of motivation.
When you get to the point of working out of passion and not necessity you will discover a whole new dimension to the concept of “work”.
Give sabbaticals a try and see what they can do for your work-life balance.
7. Cultivate a healthy relationship with your finances
It’s probably the best thing you can do to get yourself and your finances on the right track… and to ensure they’ll stay there.
Money tends to be a sensitive topic for many families. If you come from a family who shied away from money talk, chances are your tendency is to do the same.
Sometimes it’s hard to cultivate a healthy relationship with your money. It can also take a lot of time and effort. And it certainly doesn’t come naturally, so get rid of all your unrealistic expectations towards your finances.
Start from scratch in 2018.
The type of relationship you have with your money will not only shape your attitude, but will also influence your life and the way you approach it.
Let’s say your finances were a person. What do you think they would tell you? Read this article to find out.
Are you ready to plan your financial future?
When it comes to your relationship with your money the secret lies in acting fast. The damage poor financial management can bring into people’s lives is extensive. Our experts at Shuriken can and want to help you. Let’s get in touch and start fixing your financial plan.