A guideline is something that ancient builders used to guide line as they built a wall. The guide line was used to ensure the wall was straight and the builder ended up where he wanted to go.
In the same way, there are personal finance guidelines that are designed to keep you on track with your financial well being.
1. Build your assets
Look after your assets and your assets will look after you. Whether it is in stocks, real estate or your other investment vehicles, your assets are your future.
If you are focused on the share market, work out how you can continually diversify and build up your portfolio. If you have real-estate investments, consider how you can add value to your asset through a home extension or similar (see here for the best house extensions in Melbourne).
2. Pay Yourself
Paying yourself before you pay others is a key part of your financial success. Yes we all have bills to pay. But more important than keeping your phone company happy is to provide for yourself.
This may be in terms of your future pension or for a holiday later this year. Whatever it is, by forgoing the present for the future, your future will be well cared for.
3. Increase Incomes Streams
Saving is good, but it has a limit. That limit is how much you actually earn. In other words you cant save more than you earn.
The solution then to increasing your financial health is to increase your earning. By adding additional streams of income you effectively multiple your ability to grow your net wealth. Start a side business, invest in income generating sources, even taking on a second job for a period can make a massive difference.
4. Reduce bad debt
If you have bad debt – for example personal loans or credit cards at a high rate of interest – it is destroying your future wealth. Every dollar of bad debt today can cost you 10 in the future. Check this credit card debt calculator to see for yourself.
Prioritize getting rid of it as quickly as possible. Your future self will be glad you did!