Welcome to comprehensive guide to your next generation personal finance strategies. Are you spending to much? Not saving enough and tired of never ending payments?
Fortunately, the next generation personal finance strategies will guide you step by step to every personal finance for tomorrow’s generation.
Let’s get start!
According to a new survey of 1000 people from the personal finance company Bankrate, it found that 29% of Americans have more credit-card debt then they do emergency savings. As you see credit card debt is at the highest it’s ever been and it’s going worst. Another related finance study found that 39% of people say they do not have enough savings. Student loan debt has now surpassed total credit card debt.
What causes financial stress? Well, the answer is clear people aren’t educated in the basic of personal finance. Personal finance is not taught in school or in our daily life.
You have to take action and master the next generation personal finance strategies so you can achieve financial freedom.
Defining next generation personal finance strategies
Any person, corporation, or nation should know who or where they are, where they want to be, and how to get there. Before you jump to that close your eyes for a minute and picture yourself where you want to be 20 years from now. Focus and analyze, looking back on your life, in particular, your financial decisions.
Which decisions do you think you’ll be happiest about? Looking ahead will help you to build approach or a plan to have full control on your financial strategy whether it’s short or long term.
When it comes to making decisions about your personal finance keep in mind that each type of decision can be subdivided into two broad categories.
- Long term decisions, these are tactical and analytical decision you make to come up with strategies to achieve long term goal.
- Short term decisions, this deals with everyday operational decisions that are pivotal for achievement of long term goals.
Still wondering can I get rid of my debt? Is it possible for me to master the next generation personal finance strategies? You want to know !keep reading..
Why should you have next generation personal finance strategies?
I will simply put it like this. A financial strategy enables you to assess your financial needs and the resources required to support and meet your objectives and to fulfill your organizations’ overarching objective. Having a strategy enable business success and sustainability.
It will empower your finance decisions and provide security, success and sustainability. In other words your life will be much easier.
How to develop a personal finance strategies?
To start planning your finance plan, you will have to go through three fundamental questions.
- How you living?…..that’s your current situation. The propose of this question is to include general strengths and weaknesses. As well as to find specific financial strengths and weaknesses. This is to measure your financial sustainability situation, your budget, expenses and spending habits.What is financial sustainability?….It is the ability to continue now and in future current policies without causing the debt to rise continuously. in other words When you are financially stable, you feel confident with your financial situation. You don’t worry about paying your bills because you know you will have the funds. You are debt free.
- Where would you like to be? …..this question summarizes key long term financial goals. If you don’t know what you want or the purpose of what you are doing; your life may seem overwhelming, confusing, disorganized. This will lead you to make wrong finance decision.
The end goal matters!…vision is such an important part of the end goal attainment.
- How do you get there?….. every financial experts will agree that in order to achieve a goal you have to take action and this is the “core” of the next generation personal finance strategies. It describes what actions you will have to take each year to achieve targets you identified in the second question.
This might include sections on:
- personal finance
- increasing income
- proper budgeting
- paying off credit card debt
- building emergency fund
This sections summarizes the next generation personal finance strategies….you excited yet??? Lets dive into what personal finance strategies you need to attain financial freedom.
11 next generation personal finance strategies for your financial security
1-Write your plan
A no written plan is no plan. Why? because writing a financial plan is very important strategic tool. It helps you not only to focus on the specific steps necessary to make financial ideas work, but also to achieve both your short-term and long-term goals. Planning helps you stay on track and to measure your financial sustainability situation.
“Long term thinking and planning enhances short term decision making. Make sure you have a plan of your life in your hand, and that includes the financial plan and your mission.” ― Said Manoj Arora .
When writing your plan first consider to focus on the long-terms goals. Focusing on the long term first is strategic move that will help you to see the whole picture, set your priorities and develop accountability.
2-Earn extra income
Rich people never settle with a single way to make money. If they see an opportunity they capitalize on it. The same concept applies for you. It is never a bad decision to have a side hustle helping you with earn extra to pay bills.
Earning extra income is the same as increasing cash flow. This strategy is really helpful for reaching your financial goals by increasing the amount of income generated monthly. The best place to start with is a part time job that pays you steady income.
If you are too busy for another job, there are several ways to do this.
- asking for a raise at your current job
- angling for a promotion
- finding online sources of passive income
3-Make a personal finance priority
First of all, what is personal finance? The term is usually refer to the ability to manage your income and your expenses. It is the balance between saving and investing. It can also include banking, budgeting, retirement planning, insurance, and estate planning, and more.
Earlier you asked before if you can get off debts. Here’s your answer, absolutely possible with proper next generation personal finance strategies. Without personal finance strategies, it is almost impossible. You can live a life of bondage without knowing how to get off debts or adequately pay for your bills. But what good is such life?
“Know what you own and know why you own it.” said― Peter Lynch. This simply means having the necessary personal finance skills will help you to ensure all your money is managed well. The bottom line is when seeking financial freedom, personal finance plays a significant role.
Back to the first sentence we started with. Are you spending to much, remember that right? I will allow myself and say; yes you are. Because it’s easy to spend more than you should if you don’t actually know how much you’re spending.
So you have a serious problem here that needs to be addressed. My advice is same as every financial experts and money advisors. Budgeting, budgeting, budgeting your money.
Why financial experts believe that budgeting is the answer? BECAUSE, budgeting helps you figure out your long-term goals and work towards them. It also ensure you do not spend money you do not have. The point is following a budget allows you to track where your money is going and how you spending it. You can cut unnecessary expenses and invest so you can generate passive flow of income.
5-Build an emergency fund
Life is unexpected. You can never know when something can go wrong. Having an emergency plan as a back up is always a smart idea.
When comes to to managing your daily life and overcoming unexpected expenses, creating an emergency fund is must. This is your exit plan, the ultimate way out of unexpected downturns.
Close your eyes and picture this. You had a car accident and you take it to the mechanic. He tells you it will cost you $1200 to repair. If you have no emergency fund, you are in deep trouble. You might have to withdraw from your investment account. This is when your emergency fund comes to rescue, this is why it is important to have one.
Now you know why having emergency fund is so important, but what exactly is emergency fund? WELL, it is a stash of money you set aside in case of unexpected events. This will help you get through stressful and costly event.
6-Stretch your money
Most of people get really confused when it comes it stretching money, which is saving money and having a budget. They be like, why I should save and have a budget are’t they the same thing. But are they really?
As I said budget helps you to track where your money go and how you spend it. So it’s a spending plan, but stretching is putting money away for a known purpose like buying a house or a car.
The importance of stretching money? When you save you’ll be less afraid of making bold moves or from tragedies. Losing your job or having credit card debt or in case of emergencies, having saved fund prevents you from falling into financial pitfall. This will provide financial security, it will give you financial freedom. This helps you to finance down you mortgage payments, buy your first rental property, or invest.
7-Manage cash flow
If you are a business owner this might be the best strategic step on the list that feet your finance ambitions. Cash flow is the most important aspect of every business. It will help you determine the amount of money your business needs to cover debts, prepare for the future and more. So what is cash flow ?
Cash flow is the term that describe the processes of tracking the amount of money coming into and going out of your business. If you are good enough with cash flow you can predict how much money will be available to your business in the future. Also keep in mind that bad cash flow managing may lead to business failure. Cash flow is very popular among the real estate investors.
8-Know your credit score
The credit score most likely is the most important marker of your financial life. This is also know as credit report, it is a compilation of information about how you handle your credit and pay your debt .
If you’r applying a loan, your lender will first check your credit history to determine if you are a safe bet. Only then the company will issue you a loan if you have good credit score.
It is pivotal that you regularly check it. why you have to check your credit score?
Here are some good reasonable reasons to why you have to check your credit score:
- to rebuild and and maintain good stable credit
- manage your personal finances
- Helps you find inaccurate information and allows you to take necessary step to correct any information you feel is inaccurate.
- It is free, you can use credit karma or other online platform
If you are one of those who needs help paying down credit card balance, make sure to check this out. It outlines top strategies to pay your credit cards debt fast.
9-Pay off your debt
Back to 2015, a report from Pew charitable Trusts found that roughly eight of ten Americans have debt. The same report also found that the average debt is $67,900 per person. That is outrages. The truth is debt can be both good and bad. It is a useful financial tool to improve your finances in the long run. But always be caution, there is a debt trap which is considered dangerous and a serious threat to both of your financial security and health.
Debt that increases your cash flow and does not cost you money is a good debt. For instance getting rental property mortgage and using rental income to pay it. In fact, it one of the highly recommended next generation personal finance strategies to achieve financial independence.
Carrying a lot of debt leads to financial problems and causes health issues from unnecessary stress. Paying off debt is the best decision you can make. By doing so you will have a better credit score, better job prospect , and the risk will be less. In fact, you will have the finance freedom to spend on the things you really love without feeling guilty.
10-Always check your insurance plan
The word insurance means a type of contract between you and a company represented by a policy to ensure you are financially secure from financial loss or any type of problems in life. Each company has different insurance’s policies and different level of protection. Make sure you purchase the right insurance depending on your current situation so your assets can be protected .
Obviously, insurance is very important whether it is health insurance, car insurance or home insurance. But it will only do its work if the coverage is up to date. That’s why it is important to check your insurance’s plans, who knows maybe your life has changed or you get some discounts.
11-Always pay your self first
Now we come to the final step in our next generation personal finance strategies guide. The truth is you don’t need an expert advice to know that the first and the best step to be financially secure is to pay your self first. No matter what you come first.
You have bills to pay, things to buy or big chunk of debt to pay off. So always set aside amount of money each payday for your self, even if it is $100 or less. It’s up to you .
Many financial planners consider the “pay your self first” rule as the golden rule. By paying your self first you are putting away some cash for yourself and this can be motivating and rewarding.
Conclusion: Complete personal finance strategies
I hope you enjoyed our detailed on next generation personal finance strategies. This is to provide you basic information and a ground to work with. Always be smart with your money. Keep track of budget, spend wisely and on things that is absolutely necessary. Make sure to pay your self first and invest regularly. Only through investment and diversification, you can achieve sense of financial success.
Cash flow is critical part of success. Having constant flow of money helps you be pay your daily cost of living. Also, make sure to invest this cash so your cash flow is constantly growing. Before you start, set goals aside and calculate how much you need to retire and achieve financial freedom. Sometime all you need is 1 million or sometime 5 millions. Calculate and be alert of your goals. Here is the article for you to review if it is possible to retire with just 1 million dollar.
Hope you enjoy the read, goodluck. Don’t forget to comment and share and support our effort to provide high quality personal finance content.