6 Smart Things You Can do to Stop Living Week to Week – Today!
Too often, there is not enough money left at the end of the month, and you find yourself scrambling to make it until you’re next paid. The two main components to stopping living week to week is to budget the money you have and get more money coming in. Simple? Yes. Easy? Not always. The smart steps below will help you address both of these areas of money management.
1. Pay off credit card debt
Your income is your main wealth-making tool, and giving it all away to creditors leaves nothing for investments. Make a list of all of your debts. It could be scary or even shameful, but it is the first necessary step to assessing the situation. Recognise the mistakes of the past without beating yourself up, and get to work. Make extra payments, consolidate the high-interest cards into personal loans, and do not take out any new credit card debt. Once the cards are paid off, you will have more money to use on investing.
2. Pay off your mortgage
A house is often the single most valuable asset to an individual, and investing in it makes sense. Historically, real estate grows in value, and paying it off early saves you money on interest over the life of the loan. It is a relatively low risk investment, since the money is tied to a physical asset that is likely to appreciate. And imagine all of the extra cash you will have in the monthly budget once the mortgage payment is no more!
3. Invest in yourself
Retirement planning might not sound like the highest priority item for people in their 20s and 30s, but the sooner you start investing, the less money you need to contribute to end up with a sizable retirement portfolio. And who wants to live week to week in their old age? So, plan today and invest in your super account. Sites like Nationwide Super make the process easier and have online calculators.
4. Open a compound interest account
Use some of the money you free up by paying off debt to invest in a compound interest account. Savings account interest rates are not going to make you rich if you simply put $2,000 down and forget about it. In 10 years, that sum will grow to just $2,700 at 3%. However, add an extra $50 to that each month and the $2,000 turns into $10,000. Plus, if emergency strikes, you will have cash available to tackle it.
5. Invest in real estate
Don’t stop at your own house when it comes to real estate investment. Don’t have a large sum to buy an entire building? Fractional property investing allows you to buy a portion of real estate, making this type of investment accessible to more people.
6. Invest in the stock market
This is arguably the riskiest type of investment, but it offers desirable payoff opportunities. Because the stock market can be volatile, and the value of the investments is not guaranteed, do not invest the money you may need within the next 3-5 years. Investing the money you do not immediately need allows you to wait out the bad times and cash in the large returns when the time is right.
Living week-to-week is stressful; take the steps today to make your financial future more stable.