If you’ve recently acquired a full time job or have upgraded to a job that pays more, you might find that it is now more difficult to manage your cash. This is because you actually have money to deal with—and this is a great problem to have. Knowing what to do with your money is the first step toward building wealth—just ask Jason Hartman!
First, make a savings plan. Put a third of your income away if you’re able. While this is sometimes impossible, do your best and put something away, even if it is a very small amount. This way, you’ll be prepared for those unplanned periods of financial stress. While you may have to sacrifice a few luxuries in the short term, you’ll get closer to establishing financial security for life.
At the same time, don’t be afraid to spend money on things that will make you a more employable person. Career related investments can include education, informal training, books telling you how to do things, fancy clothes. If these things will help you get ahead in your career, budget money for them without guilt. Similarly, take time to think about what it is you really want to be doing for a career. Even if your dreams seem ridiculous or unattainable, think about them and focus on making them happen—even if it takes some time. You’ll be happier in the long run.
You should also try to pay off some of those student loans, if you’ve got them. If you’re able to pay of a chunk of the loan, you’re going to save money in interest and your monthly payments will make more of an impact. Earning enough money to pay off large amounts of such debts may take some time, but it will be worth it.
Start thinking about investments now, even if you don’t feel like you have a lot of extra money. Invest in yourself by saving for retirement, purchasing real estate that will earn you passive income, and building up your savings account. You’ll be surprised at how easy it is to invest even if you’ve got a little budget.
Finally, think about giving back to charities that you care a lot about. Make sure you’re donating to reputable charities by checking them out before hand, but be generous where you’re able. You’ll feel great (and be able to write it off).
(photo credit: uzaigaijin via photopin cc)
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