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5 Things About Investing That You’ll Regret Not Knowing by Age 30

5 Things About Investing That You’ll Regret Not Knowing by Age 30

You are never too young to start saving money, investing and planning your financial future. Most parents nowadays advise their sons and daughters to start thinking financially as early as their teenage years. The art of saving and investing money is a learning process, but you will never learn anything until you experience it.

Below are five tips you need to know in order to change things around for the better. They’ll give you insights about investment that will help you establish a stable financial future.

1. Recognize the importance of inflation.

Do you know why investing, not saving, is the best path for you if you want to achieve your long-term financial goals? It has everything to do with inflation. Inflation means that the prices of goods and services went up by an average of 1.5% last year. How about your money in your bank savings account? It grew by an average of around 0.87%. So if you want your money to grow and not just sleep securely in the bank, don’t just save. Investing will provide better rates of return and more chances for your money to work for you.

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2. Automate your money management system. 

Automation takes out the emotional factor in your personal finance. Instead of you painstakingly forcing yourself to save or invest every month, it’s more convenient — and more effective — to set up an investing system, monitor it every month and just “forget” about withdrawing it prematurely.

3. Before investing, secure an emergency fund first.

Opening a bank account for your emergency fund is a necessity nowadays, whether you have job or not. Although the interest rate of bank accounts is negligible, the sole purpose of putting your money in a bank is the security it provides and the convenience of withdrawing money from ATMs. Having a bank account influences you to consistently deposit money in your account so that it will grow over time and provide a nice financial cushion.

Force yourself to monitor your daily balance. After all, no one wants to look at an empty bank account, right?

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4. Start learning more about investing for beginners.

Learning the art of investing your money yields great monetary gain if done successfully.

For beginners, seek help or do research. Find someone trustworthy. This professional should have an extensive knowledge about monetary investments. You can also attend seminars done by company firms or you can pay someone to do it for you. A basic understanding of financial management is a major plus when venturing into investment opportunities.

5. Start saving for retirement now.

Thinking of the future gives you a better idea of what to do and how to act now. At some point in your life, you will need to retire from your job and rely on your retirement funds. Having a retirement plan during your career is one way to ensure a steady flow of income when you retire. But if you do not want to avail yourself of any kind of plan because of your limited income, you can always set aside a fixed portion of your monthly salary and enroll in a monthly investment program.

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Discipline is the key here — you need to commit a specific amount monthly and consistently. Setting a target balance for your retirement fund monthly, not annually, ensures that you will be forced to invest a fixed amount of your salary every cut-off. The sooner you start this process, the larger your retirement fund can be in the future.

Pursuing a stable financial future is a life-long endeavor. Learning the hard things as young as possible gives you the experiences and knowledge to commit to whatever financial moves you will make in the future.

Start now and start early!

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Featured photo credit: cohdraNKNmnycns7.JPG/cohdra via cdn.morguefile.com

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Lianne Martha Maiquez Laroya

Lianne is a licensed financial advisor, Registered Financial Planner, entrepreneur and book author.

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Published on January 8, 2021

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

Ever wondered whether your credit card debt is the reason you’re in a bad financial situation? You can’t enjoy any fun activities because a good chunk of your money goes toward debt payment. Heck, you’re even behind on some of your monthly bills.

The effects of clumsy debt management are too many to list here. This guide is going to help you discover how to pay off credit card debt fast and start chasing your financial goals.

Debt problems are the last thing anyone wants to encounter. But things can get out of hand when all the “little debts” you take accumulate in interests.

What if you knew some simple and proven ways to be debt-free quickly? Implementing them would mean better financial health for you. It becomes possible to free up cash for your “wants.” These include taking a trip or buying something you’ve always desired. All that while paying your bills on time!

Let’s not wait any longer. Here are 7 powerful tips for paying off credit card debt fast:

1. Pay More Than the Minimum Credit Card Payments

Many people only pay the monthly minimum on their credit cards. Truly, that’s the right amount for staying on good terms with your credit card company. But you need a different approach if you’re looking to achieve financial independence within a short time.[1]

Most of your payments go toward interest costs when you only pay the minimum amount. A substantial sum of your balance remains standing. As a result, it becomes more expensive to eliminate your debts.

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You don’t want to wait more than 10 years to get rid of debt while it’s possible to do it sooner. All you have to do is double that $100 minimum payment to $200 or go higher.

The good thing is that minimum credit card payments are affordable in most cases. By paying a higher amount, you reduce your interest costs, lessen your borrowing period, and boost your credit score.

2. Start With High-Interest Credit Card Debt

If you have more than one credit card debt, prioritize putting the extra money toward the ones with the highest interests. This debt pay-off strategy, known as the debt avalanche method, is essential for being debt-free quickly.[2]

First, you need to list down all the credit card debts you have in the order of their interest rates. Next, you choose the one with the highest interest and pay a significant amount toward it each month. It can be an amount twice or even thrice larger than the minimum payment.

At the same time, you make monthly minimum payments on the other debts. Their interest charges won’t be as costly as that of the first debt on your list. You only move on to the next high-interest debt after the first one is gone. Remember that your focus is on the interest rates and not the balances.

3. Revisit Your Budget

Budgeting is useful for tracking your financial moves. Once you create a budget, some tweaks along the way can make it work for you better. One situation that requires you to revisit your budget is when you’re struggling with debts. It might hurt a bit to slash some expenses. But you also don’t want to miss out on achieving financial freedom in the long run.

You can reduce some variable expenses to free up more cash for credit card debt payments. They’re the ones that change from time to time. Some examples are groceries, fuel, and clothing.

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Other opportunities for cutting down your spending lie in non-essential expenses. Instead of dining out all the time, you can cook at home more to save money. You can also share some subscriptions with friends and pay a fraction of the cost.

If you’re determined enough, you can eliminate all your unnecessary expenses and focus on paying off your credit card debt first.

4. Avoid Using Your Credit Cards

Do you want to know how to pay off credit card debt with a low income? One simple way is to stop using them. Having your credit cards everywhere you go means that you’ll be more tempted to buy unnecessary stuff. In this case, you spend money that you don’t really own and get deeper into debt.

The quickest fix to stop the debt build-up is spending with cash. You’ll be more aware of everything you can afford at any particular time. If you decide to keep one or two cards to ease the transition, always make wise choices. For instance, only use them when experiencing financial difficulties.

It’s best to categorize your fun activities under “discretionary spending” in your budget. This way, you won’t need more debt to kill your boredom. By halting your credit debt from accumulating, it’s easy to pay down what you already owe and be happy with the progress.

5. Start a Side Hustle to Boost Your Income

You’re probably turning away a lot of money by not monetizing your skills. Everyone has something that they’re good at doing. And you can use that to generate extra income for attacking your credit card debt.

If you look around your neighborhood, you can find several side hustle opportunities. It can be pet sitting, tutoring, or lawn mowing. You can start an online business by offering services such as digital marketing, content creation, and web development. Such skills go in high demand on freelance sites and job boards.

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Finding clients on social media is also a good strategy to utilize your skills and make more money. Facebook groups, Quora Spaces, and subreddits are some places to look for side jobs. You only have to join a niche-specific platform, share your services, and respond to any opportunities.

It’s possible to learn a skill, practice it, and earn from it. Use the free resources online or purchase some e-courses to get started.

6. Sell Your Used Items for Extra Cash

Starting a side hustle isn’t the only way to generate extra money. You can turn unwanted items into cash for paying off credit card debt. Whether it’s an old TV, book, or furniture, there is always someone itching to buy your used stuff.

A garage sale, as much as it’s old-fashioned, is perfect for getting your neighbors and passers-by to buy from you. You keep all the money because there are no business permits or taxes involved. While you may not make much cash, it’s better than leaving your stuff to go defunct in your storage.

Other than that, you can sell your used stuff on online marketplaces. Facebook groups are great places to start if you want quick approvals and hence sales. You only have to ensure that your listing follows Facebook’s commerce policies.

When selling any pre-owned items online, ensure they’re in good shape to avoid problems with your buyers.

7. Know When to Seek Help With Your Debt

Asking for help with your credit card debt can be challenging to do. But letting it drown you is a road you don’t want to take. While you may feel embarrassed at first, it’s the best way to get back on track when you run out of options.

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There are tons of non-profit credit counseling organizations that can offer you free guidance on how to escape the debt trap. An example is The National Foundation for Credit Counseling. They simply review your finances and help you determine the source of your financial problems. After that, they match you with an actionable debt management solution.[3]

In extreme cases, the debt solution can be:

  • Debt relief – where your debt is partially or wholly forgiven
  • Debt consolidation – taking out one loan to repay others
  • Debt settlement – the creditor forgives a significant portion of your debt
  • Bankruptcy – legal process for seeking relief from some or all your debts

It’s necessary to carefully weigh your options before deciding on the way to go. Find out how it might affect your credit score and any other risks.

Wrapping It Up

Debt is a major setback when you’re trying to prosper in life. Paying off credit card debt is essential if you want to reach your financial goals. That means having more free income, a good credit card score, and even a chance to retire early. You become more productive each day because of the peace in your mind.

So, you now have some tips on how to pay off credit fast. Go ahead and get rid of that good life progress killer!

More Tips on How to Pay Off Debt

Featured photo credit: rupixen.com via unsplash.com

Reference

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