Money plays a huge role in our lives every single day. If you think about it, a good portion of our day is spent either making money or spending money. And when we are not making it or spending it, we are most likely thinking about it. We make plans for next week and next month. We think about the goals that we want to achieve now and in the future. We think about our financial security and our retirement. And pretty much all of that will require money at some point.
Because money plays such a big role in our lives, it is extremely important that we manage it well. Managing your money well allows you to live a fun and happy life now, and it makes it so much easier to plan for your future.
Money Management Tips to Help You Plan For Your Future
Establish Your Priorities
An important step to managing your money well and living a happy life is to establish your priorities.
You need to consider where you will live. Will you live in your hometown, or possibly overseas?
Would you like to own your own home, or is renting the right option for you?
Will you marry and have a family?
How many vacations will you take each year?
What kind of car would you like to drive?
How much money do you need to save for your retirement?
Each point will involve money.
As you consider each point, think about how much it will cost you, and how much you are willing to spend. Sometimes the two do not match.
For example, a nice 3 bedroom family home may cost you $450,000. But you may only be prepared to spend $350,000 so that you can afford to take one or two vacations each year. So you need to consider which item on your list is a higher priority for you – the nice family home, or taking vacations.
Clearly Identify Your Sources of Income
Will you work at a traditional 9 to 5 job or will you own your own business?
Will you travel around the world while earning money as a freelancer or a business consultant?
Will you earn money from real estate or stock market investments?
Once you establish your sources of income you will find it easier to work on identifying your priorities because you will know how much money you have to work with.
Create a Spending Plan
The two most important factors that you will need to consider when you work on your spending plan are your sources of income and your priorities. Together they will dictate how much money you have to work with, what you will spend it on, and how much you will save for your future.
Protect Yourself and Your Money
When you find yourself unable to sleep at night does your mind instantly begin worrying about things?
What keeps you awake at night? When I have trouble sleeping I find my mind instantly begins to think about the things that I have been procrastinating about. And one of the things that I have been procrastinating about is getting our wills done. While our wills will actually be easy and pretty straightforward to do, they need to be written up and finalized.
You can protect yourself and your money by writing a will that directs what happens to you and to your money in the event of a tragedy.
Of course it is also very important to protect yourself today. Make sure that you have all of your insurance policies up-to-date, with enough coverage should anything ever happen. This includes your life insurance, health insurance, disability insurance, as well as your home and auto insurance.
This will give you a sense of financial security and peace of mind because by having all of these items in place you and your money will be protected.
Plan for Your Future
Begin thinking about your retirement, even if you are only in your twenties. Would you like to retire at 35 and be financially independent, or are you happy to work until the day you die?
Many people do work well into their 70’s and 80’s. Not necessarily because they need the money, but because they truly enjoy what they do, and having something important to do each day helps keep them healthy and fit.
Only you can decide what you would like your future to look like. Allow yourself to dream about your future, and consider how much money you will need to begin saving now to ensure that your dreams come true.