Our mind is powerful. It greatly affects the way we live and the way we behave. We often say that financial freedom is hard to achieve. Yes, it may be hard but it is possible, it is achievable.
Napoleon Hill, author of one of the best-selling books of all time “Think and Grow Rich” states that
“Whatever the mind can conceive and believe, it can achieve”
With that said, i want you to know and say to yourself that a better financial life is not that hard to achieve. You can be better every year, and it only takes a decision to be better. While still in our 20s, we have the advantage of time, we have more time to become better and have a better financial life…
That is why today I want you to decide to have a better financial life,
here are 7 things to master while in your 20s for a better financial life.
1. Living below your means but within your needs
For you to save more, you need to spend less, it’s only a simple math equation. It is also a logical thing to do if you want to have more money in your bank account year after year.
When it comes to our personal finances our mind plays a bigger role, though we know that it is the logical thing to do our emotions affect the way we act.
It is really easy to spend if you have the money, give me 10 million today and i’ll show you how i can spend it in a couple of hours. What’s really hard to do is stopping yourself from spending even if you know that you have the money.
“Kaya naman ng sweldo ko kukuha na ako ng iphone plan”, “Kaya naman ng sweldo ko mag aapply na ako ng car loan”, “Lumaki na ung kinikita ko sa business lilipat na ako sa magandang condo” and etc..
Familiar din ba sayo itong mga to?
Often times pag kaya na ng income natin we tend to upgrade hastily, kahit okay pa naman ung prepaid phone, kahit okay pa naman mag commute, kahit ok pa naman ung apartment namin and etc..
One more thing that affects us on how we act on our finances is peer pressure. Put in mind that you will never be in the same situation with any of your friends with regards to finances, we are all unique in our ways, that is why it is important that you know yourself well and you have your own standards of living your life not based on other’s standards. You don’t need to live in other people’s lives, you don’t need to buy things just because all of your friends have it. Just be honest with yourself what you can afford and what you can’t.
Genuine people accepts genuine people, while fake people only fool themselves to be accepted by fake people as well.
Master living below your means and within your needs, and i’m sure you’ll have a brighter financial future.
2. Avoiding debts.
In the past, me and my family really had a bad experience being into debts, it takes off our confidence, it gives us stress, it makes our life harder and it gives us sleepless nights. That is why i told myself that i won’t get into debts even to the extremes.But here’s a perspective of debt i want to share..
Debt is a hard to swallow word that’s why some call it Liability. It is easy to accept that you have liabilities rather than accepting that you have debts.
Let me give you an example.
You want a new phone, an iphone. We all know that an iphone is expensive, that is why stores offer payment plans like 6 months to pay, 1 year to pay or 2 years to pay. You happen to avail the 2 years payment plan because the monthly payment is really low. Some say that it’s only a monthly liability but did you know that it’s actually a debt as well? why? because you haven’t paid it in full yet and the amount you will pay has interests in it. The store only lends you the iphone and if you don’t pay the monthly bills it can be forfeited. You will pay more money in the long run.
Identify the things that are actually debts and avoid it, i’m sure there are other ways to get what you want without putting yourself into debts. Remember that financial freedom is a debt-free life. If you do have debts right now, make every effort to pay them off as soon as possible.
3. Prioritizing needs vs the wants
This goes to budgeting your income sources. Again your emotions is your enemy, needs are needs and you can’t live without it. While wants are wants, it is the things beyond your basic needs which are not really necessary for your living but gives you short term comforts. You can read my article a fine line between your needs and wants to have a better grasp of this.
What i want you to do is to put every need on top of your budget and rank them in terms of priority before you spend on your wants. An example of this is :
Top priority need : A savings account, food, shelter, utilities.
Lesser need : clothing, transportation, mobile load, coffee etc.
Wants : new gadgets, new clothing, new shoes, new bags, travel, better apartment, and etc.
Master prioritizing your needs vs your wants and i’m sure that you’ll get a better financial life in the years to come.
4. Planning your finances
Planning is very critical in every aspect of your life, especially in your finances. Remember the saying
“If you fail to plan, you plan to fail”.
This applies to you, you have to be focused and goal oriented in planning your finances.
Have a list of your long-term financial goals. Like preparing for your wedding, for your own house, for your children’s education, for a start-up business, for a car, for a travelling fund, for your retirement and etc.
Having this list tells you how much you need to have in order to achieve them. Then start listing short-term goals that gets you nearer with your long-term goals. Let say you are preparing for your wedding in two years, have a short term goal of saving let say 50,000 pesos in the first year. Once you achieve that set another short-term goal of saving 50,000 pesos in the succeeding year, by doing this it gives you a kind of short term fulfillment that makes you want to keep on pushing to achieve your long term goals.
Last thing is, don’t be intimidated with your long term goals and settle for less.
‘Ang laki naman ng iipunin ko, ang tagal naman, ang hirap naman magipon, hindi ko yata kaya to, okay na siguro ung simple na lang.’
Consider these long term goals as faith goals.
Be faithful with these goals and ask God for His guidance, partner with God in achieving these goals because many are the plans of man but the plans of the Lord will stand.
“Whatever your plan in life is, if it is according to God’s will, it will happen and if your plans didn’t happen, be secure because God won’t give you something you won’t be happy and content with.”
I have made this post into two parts so that you’ll have the time to re read it medyo mahaba na kasi eh hehe. I hope that you have learned something from this post and apply the things i’ve written here. A better financial life is possible and financial freedom is achievable. Master these things and i’m sure you’ll be right on track to financial freedom.
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See you on the next post
Update: read the second part here
Photo credits : Zürich Tourismus, Johannes Lundberg, Laurent Bagnis, clappstar, CollegeDegrees360, Grand Velas Riviera Maya