We’re already nearing the end of the first half of the year. And while it didn’t exactly go as any of us has planned, we still have the chance to take our personal finance’s future into our own hands. If you have the luxury to control your money in these trying times, it’s best to take advantage of it and set to achieve these milestones before this challenging year ends.
The key here is to assess your current financial standing, your needs, and where you intend to go in the future, once the smoke clears.
Budget with Confidence
Budgeting can be challenging if you’re still in a happy-go-lucky phase. Your goal for this year is to develop the habit of managing your finances effortlessly. The longer and more serious you are at sticking to a budget, the easier it gets. Experiment what works for you and your finances, stick to it, and you’ll be doing this like it’s second nature to you.
Good Credit History
The key here is living within your means. When you can pay all your bills on time, your credit history becomes spick and span. That means creditors consider you financially stable and you’re no longer living paycheck to paycheck.
Emergency Fund
There’s no better time to talk about emergency funds than right now. We’re finally seeing the importance of having a considerable amount saved for challenges that are out of our control. As long as you’ve gotten a hang of your spending, you can focus on actually saving up for an emergency fund.
The recommendation is still saving up enough to cover all your living expenses for a span of 3-6 months in a cash savings account. This is to ensure that the money is easily liquidated once needed. Hopefully by the end of the year, most of us have learned to take emergency funds more seriously.
Become an Investor
Saving shouldn’t be your only goal for 2020. If you truly want your wealth to grow, get into the world of investments. It doesn’t matter how small your starting investment is, as long as you’ve actually started and are determined to grow it. We’ve got a lot of investment tips right here in our blog, so be sure to check them out to help you get started.
It’s finally time to add investor to the many titles you’ve gained over the years. Good luck!
Know your Net Worth
It’s finally time to assess yourself. All of us have a net worth and it’s important to know it to discover where you really are at your finances. Just total all your assets (savings, investments, properties under your name, etc.) and minus your debts (loans, credit card debt, etc.).
Your net worth by the end of the year should at least be a positive number. And make sure you’re on your way to (at least) doubling it by next year!
There’s still a long way to go to be truly financially independent. However, we understand that times are currently very tough. So let’s focus on these five milestones first to ensure you’re ready for 2021 regardless of how challenging 2020 has been.