Here are 3 simple decisions you can make that will affect your future finances:
– Take the time to check your account details online and make sure that your savings account rates outpace inflation.
If you are holding money in a savings account that does not provide competitive rates, then you are actually losing money the longer that you keep your finances in that place. Many traditional savings accounts simply do not have the interest rate that you are looking for. You must look for other types of savings accounts such as jumbo savings accounts, certificates of deposit or long-term money market accounts. There is always a way to move your interest rate past inflation; it simply takes more research these days in order to find it.
– How you view debt will definitely affect your future finances.
The only reason to get into debt is to create more assets for yourself in the future. Debt for consumables is one of the least effective financial techniques that anyone can implement into their daily lives.
If you are taking on debt, make sure that you are gaining a resource that will add to your assets. These activities may include adding a feature on a house, gaining a new skill specifically for a job or investing in a business that has been thoroughly researched. These activities absolutely do not include going on a shopping spree at your favorite mall or upgrading yourself to first class on a vacation in which you suddenly decide to splurge.
– What do you do with your expendable income?
After you have paid all of your bills, what do you do with the rest of your money? The money that is not moving towards your immediate expenses should be moving towards improving your quality of life. There is only one way to truly improve your quality of life over the long-term – your money must make more money for you.
Your expendable income must be put into activities that will continue to make money for you. Hopefully these activities will include streams of passive income that do not require you to trade your time for money. These streams of income may include dividends on stocks, investing in a business that does not need to be personally managed or purchasing real estate that can be rented out easily.
These three simple decisions will have a huge effect on how your finances will serve you in the future. Remember that money is a tool for your quality of life. Never overlook its value to you or its ability to free you from the daily grind of the rat race.