Regardless of what you do for a living, there are certain Online money lessons that every individual must make themselves familiar with. My experience as an online moneymaker has taught me some valuable financial lessons that I wished I knew earlier. While you are still young, with these 10 online money lessons, you can up your financial literacy and make wise financial decisions for your future:
Online Money Lessons Everyone Must Hold On to
#1: Save for Short-Term and Invest for Long-Term
We all have goals in life – to wear the best clothes, buy a car and a house, etc. Unless your salary is good, you do not need much planning. However, if you fall into the category of average people, then you will need rigorous financial planning. What I have learned is, you can save money for short-term goals and invest for long-term goals. Today’s generation has to face different challenges and hence they need a different kind of support. This approach will help offer the support they are looking for.
#2: Pay Your Credit Card Bill on Time
Never carry forward your credit card bills. At least pay the minimum balance that’s required of you. Otherwise, you will have to pay the interest rate too and that means you are paying additional.
#3: Budget Everything
It is said that a life without a budget is a life without a plan. If you do not attempt to limit your spending, then you will obviously overspend. It is always good to have a cushion in the form of savings or emergency funds. Just because you are doing financially great now does not mean you will be in the same financial situation 5 years from now. Therefore, you can bundle your spending and pay less in every term. If you are looking to buy internet, phone and TV service. Why spend on each separately, when you can bundle with a Spectrum triple play package. It could be better or worse. In any case, with proper budgeting, you can plan a better financial life.
#4: Save for the Rainy Days
One day, it is going to rain and you need to be ready for all kinds of emergencies. This calls for having a dedicated savings account. You must have enough amount in your bank to cover 3 to 6 months’ worth of expenses.
#5: Keep Emotions Out of Finances
When emotions are involved in financial decisions, you are prone to mess up. For instance, many people recline towards retail therapy when they are in stress. That’s when they overspend and come in more financial distress. When you keep emotions and money separate, you will always be safe.
#6: Recognize Needs vs Wants
If you want financial success, the sooner you identify needs versus wants, the better. Needs are all the expenses that are essential to life whereas wants are everything else. Check your savings to answer whether you are balancing between the two correctly. If your savings are less, that means you need to cut back on your wants.
#7: Use Debt Wisely
Debt is the kind of money you need to use wisely. If you do not set limits, you could become bankrupt too. In life, we are presented with situations that require us to take debts. It could be student loan, credit card loan, auto loan or mortgage. No matter what it is, you must plan for future expenses to protect yourself from a rough money lesson later on.
#8: Higher Rewards Come with Higher Risks
If you are planning to keep your short-term savings in a bank account, you are sacrificing on the returns. If you think you can take a risk, then you can invest that money in the stock market too. Such a higher return investment is better for long-term savings.
#9: Automate Your Savings
If you think you are not very good at saving, then automate them. This way, the set amount will automatically subtract from your paycheck and redirected into your savings account. Here, you will not have to think about transferring funds into your savings account. You will hence protect yourself from the risk of spending that money.
#10: It Is Never Too Late to Learn
The financial service industry is ever evolving. New products and new ways of saving constantly evolve. If you want to make the best financial move, then keep up with these changes. Read all updated account policies and watch the news. You will realize you are never done learning.
Everyone likes to live a luxurious lifestyle but if your financial situation does not allow you to live that way, go easy on yourself. Start acting on these money lessons early in your life to stay out of future troubles. You can also create multiple streams of income.