What is economic well-being? How many of us can reach it? And above all, how?
In this article, we will learn to better manage expenses, to protect ourselves against catastrophic problems and finally to invest what we have put aside.
Through practical examples, detailed explanations and useful advice, we will know the three fundamental steps to create the much-dreamed economic well-being.
Things we need to know and do to become wealthy
Whatever you define our word, wealthy takes time. Becoming wealthy can be a goal.
If we pursue it deliberately and carefully, we will learn some good habits that, applied constantly, will help us not only to accumulate well-being, but not to squander it when we think we are “safe”.
Everything you need to know
To face such an objective it is necessary to adopt the right mentality, which is based on some concepts that we must always keep in mind:
- The world is full of distractions – each of us has its weaknesses and temptations. The trick is to be aware of it, and be ready to face them.
- Well-being belongs to those who are attentive – nothing valid happens without planning and commitment. Building wellness is simple, but it is not easy.
- Nobody cares about you more than yourself – it’s up to you. You are solely responsible for your future well-being. This is good news, because no one else would take as much care of it as you do.
All you need to do
It’s time to take control of your economic future.
Here are some steps to get started:
- Visualize your future – take a sheet and write down what well-being means to you. Imagine a future where you will have achieved this goal, and describe it.
- You are determined to win – it all starts with your decision. If you really want your future to be as you described it in the previous step, make the decision and take it all the way.
The 3 steps to economic success
There are three basic steps that each of us must take to achieve economic success. They will be slightly different for each of us, but the basic structure remains unchanged. If you take these steps and keep repeating them, you will reach your goal. It won’t be easy, it will require a lot of work, but the mechanics are simple.
- Spend less than you earn. This is undoubtedly the fundamental thing to learn to do. There are two ways to do it: you can spend less, or you can earn more. The best way is to do both.
- Insure yourself against disasters. As much as this article can help you take control of your finances, there are things in life that you cannot control. Fortunately, there are ways to mitigate the effects of catastrophic events such as illness and death, such as insurance and emergency funds.
- Invest wisely. Learning to manage expenses and eliminate debts are fairly simple things, but when it comes to putting money aside for the future, we are inundated with a myriad of possibilities, and this often leads us to do nothing.
Spend less than you earn
Spending less than you earn is the first of our three steps, and it is the foundation for everything that will follow. If you can follow this step, everything else will come by itself.
It’s about developing good habits. The nice thing about habits is that they quickly become part of our natural instincts. There are two things you can do to achieve this: spend less, or earn more. The ideal is to do both.
Having a budget does not mean tracking your expenses, it is a matter of deciding in advance how the revenue will be used. Learning to manage your money in this way means learning to know yourself, and avoiding those behaviors that lead us to unnecessary expenses.
An effective way to control expenses is to have two bank accounts: one dedicated only to expenses, in which to keep only the money necessary to pay bills, mortgages and recurring expenses. The second account instead will be the one where we will keep the money for the daily expenses.
Each week, compare the actual releases with those scheduled in the budget. So you can check how much you are spending more (or less), and adjust non-recurring expenses.
Debts are a problem that we all have to face sooner or later. The only way to get rid of a debt is to pay it off. Start by making payments due for each type of debt, and try to pay off minor debts first. By doing so, you will soon come to extinguish the bigger ones, and finally free yourself from this uncomfortable situation.
Try to organize your bill, mortgage and debt payments the day after your payday, if you have a salary that enters the same day every month. By doing this, you will avoid unnecessary spending driven by the fact that the bank account looks richer.
In life, path accidents happen: fines, breakdowns of household appliances, unexpected expenses. Being aware of it and accepting it is the first step in dealing with these problems when they arise.
When something happens that puts you in trouble, the first rule is not to panic. Plan ahead how you can handle such a situation, so that when it shows up, you already know what to do. Avoid situations that put you at risk.
For example, if you know that you tend to buy useless things when you can’t sleep late at night, turn off your PC and phone and read a book. Learn from your mistakes, and try to make sure that you won’t make them again in the future.