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7 Excuses Most People Use To Avoid Financial Responsibility

7 Excuses Most People Use To Avoid Financial Responsibility
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Financial responsibility is something all adults need to think about as soon as they can. At some point there will come a time when you don’t want to or simply cannot work anymore, so you need to financially prepare for your retirement. While in an ideal world everybody is ready for this, in reality not many people are adequately prepared. If you are using any of the following seven excuses to avoid financial responsibility, then take heed: If you don’t take care of your money, then it won’t take care of you.

Excuse 1: But I only live once!

Kids today use the excuse “YOLO,” or “You Only Live Once,” to spur themselves into trying new things. While the intent of YOLO is a good one – that is, so people can get out of their comfort zone and maybe discover themselves and what they are capable of – many have skewed the meaning into, “I’m going to die anyway, so let me buy whatever I want.” While it’s good to splurge once in a while, you also want to make sure you’re not doing it to the detriment of your finances. Yes, you only live once, but for most of us, it’s going to be a long life. There is time enough to enjoy many things in life, but you must also make sure you are financially solvent to do it.

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Excuse 2: Retirement is so far away, I’m only 20!

People say that youth is wasted on the young and in the case of retirement saving and financial responsibility, that is very true. Being young is a great time to try new things, but you also have the best asset any investor can have: time. When you are young, you have time to let your investments grow.

Excuse 3: But I need a new car/clothes/shoes to look good and move up.

Nice things are great to have and generally last longer. A good car is definitely a good investment, especially if you plan to keep it for a long time. However, if you change cars each year and you can’t really afford it, you are just digging yourself deeper into debt.

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Excuse 4: These are the things I need now!

Well, what are these things you need exactly? Sometimes, what we thinking we need now are not exactly needs, but stuff we want. For example, you’ve probably heard those commercials that say, “Cash out that structured settlement now! And get the money you need!” When a person has a structured settlement from an insurance or legal claim, he or she can go to a company that can give them a lump sum of money in as little as a few hours in exchange for waiting for the payments. Sounds good, right? Well, the truth is, when you cash out a structured settlement, you will lose a good chunk of money. Now, if you use the money to invest in an education or business to make more money for you, then great. If not and you just want to buy things now, then it’s a bad decision.

Excuse 5: I’m going to lose my money in the stock market anyway!

Yes, it’s true that the stock market is very risky and it goes down and up a lot. However, studies have shown that on average, the market can give you returns of up to 12 to 14 percent per year over a long time. That means if you start now, you still have time to ride out the bad years and come out on top.

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Excuse 6: Oh no! I need to get my car/roof/plumbing fixed!

Stuff happens – that’s just part of life. While you can’t predict these bad things, you can always anticipate them. That’s why you need an emergency fund, so that when stuff like that does happen, you won’t be decimated and you can cover any immediate expenses. Start by saving up $1,000. That should be enough if you have to get you car fixed so you can get to work. However, you need to build up at least six month’s worth of expenses should something worse happen.

Excuse 7: My debt is too big, I’ll never get out of it.

There are many approaches to getting rid of debt, but the first thing you need to do is stop creating more. Live within your means and pay down your debt aggressively. For many people this is the first step to financial responsibility and, eventually, financial freedom.

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Featured photo credit: Stop Financial Excuses via medexec.org

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Last Updated on July 20, 2021

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There
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Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

Break Free of Your Finances

Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

Though it seems hard to believe, it is really very simple to get financial freedom.

To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

1. Stop Unnecessary Spending

We often spend money inwardly, instead of objectively.

For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

To stop this habitual spending, log down all your spending over the course of a month.

Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

2. Plan a Monthly Budget

This is a great opportunity to get serious.

Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

3. Cut-up Credit Cards

Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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If not, you may want to consider ridding your life of the burden that credit cards bring.

Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

4. Increase Savings

There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

It’s good practice to save up to 15% of your income.

Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

5. Invest Wisely

Consider investing in funds.

Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

6. Invest in Gold

There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

Another way to invest in gold is through ETFs (Exchange Traded Funds).

These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

7. Stash Emergency Funds

Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

Make it hard to get your cash.

Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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8. Find Fabulous Mentors

Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

9. Be Extra Patient

Patience is the key of financial success.

Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

Financial Freedom for All

Anyone can achieve financial freedom, regardless of their financial circumstance.

Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

Featured photo credit: rawpixel via unsplash.com

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Reference

[1] Hartford Gold Group: IRA Retirement Accounts

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