Financial security means knowing you can afford to pay for the things you want, now and in the future. It is the main drive that motivates us to invest, save and insure. Money management skills are not something we are born with, but something that we must learn through study and personal experience. You can be financially successful, even as a newcomer in a foreign country. Of course, you must also have knowledge about the basic tools that can help you achieve your goals, such as choosing the best Canadian credit card on the market, which are the best investment advisors, and what is a budget calculator.
Statistics show that often people have unrealistic expectations when it comes to their hopes and dreams of financial improvement. Even though they plan to manage their money better, people tend to implement changes that are too radically different from their lifestyle and set too many goals. This can generate a feeling of being overwhelmed and cause failure in all aspects regarding finance. If you ever felt like this, don’t despair. Whatever the reason is for your past failures, this year can be different if you focus on some failsafe ways to becoming financially successful.
Set Clear Financial Goals
One of the most important aspects you must keep in mind when it comes to financing is to have a clear understanding of what you want to achieve. Do you want to pay off your debt? No problem! How much debt do you have? How much of your debt do you want to pay off? By when do you want to pay it off? Goal settings work best when they are dead on and time-bound. Try breaking down your financial goals into time-frame milestones which can be daily, weekly, monthly, annual or even longer. Be aware of what your short term and long term goals are. A good idea is to break huge goals into more manageable short term goals so you can track your progress and not deviate from the plan.
To achieve your financial goals, use the SMART acronym as a facilitator tool. These should be:
S – Specific: Set up clear goals of what you want to accomplish (e.g. pay off $20,000 student loans) and a clear deadline for it (e.g. in 20 months).
M – Measurable: Establish a measurable way to reach your goals. For example, make $1,000 lump-sum payments for 20 months.
A – Attainable: Do a reality check and make sure your goals are Attainable. Ask yourself if it is possible to make this happen and if you are willing to pay the price for reaching your dreams. For example, are you willing to take the train to work every day instead of the car to save extra?
R – Relevant: Figure out how important is to you paying off your student loan and how it will benefit you long-term, for example by being able to save more money.
T – Timely: Ask yourself when will this goal be achieved? Will it take you a few months or do you need to set up more short-term milestones over the duration of a year?
Find Alternative Income Sources
If cutting your expenses is not an option, you can win the battle of the coin by increasing your income. One way to do this is to advance in your current position and earn more. Try investing more energy at your job, ask for more responsibility or negotiate a pay rise. If this is not possible, consider looking for a better paying job elsewhere.
Another possibility to reach financial bliss is to diversify your income sources. There are countless ways to supplement your salary in your spare time. Figure out what you like to do and what you are good at and turn it from a hobby into an income source. For example, you can start your own blog, sell items on Amazon, flip items, rent a spare room, teach English online, walk dogs or be a freelance writer. You can make an extra $20,000 to $70,000 per year that you can use to pay off debt, invest or save.
Build a Credit Card history
Tell me what your credit card history is and I’ll tell you who you are! In today’s world, our credit card history is part of our identity. Whether you want to lease a car, rent an apartment, buy a phone, get a mortgage or secure a business loan, you will certainly need a good credit score. In order to build your credit, you must prove you are a responsible customer. Start by applying for a credit card and make sure you use it wisely. Avoid having any debt with high interest rates that you won’t be able to afford in the future. Paying your bills on time will also help you avoid high-interest costs. Try keeping your account balances below 35% to show lenders that you are able to handle credit.
Use Cash Back Responsibly
Cashback is offered by many credit card companies on reward credit cards. Basically, you can earn back some of the money you spend. Using cash back for everyday purchases is an easy way to spend money smarter. Usually, there is a limit on how much you can get back on eligible purchases. For example, a certain type of credit card can give you a 5% return for gas up to $1,500 for the quarter and 1% for all other purchases. However, do not misinterpret cash back as an encouragement to spend too much. Think of it more like a bonus on the money that you would spend anyway, even if you weren’t earning rewards. The tendency to overspend will send you right into debt and the interest charge could end up canceling the perks of the rewards.