Spend, spend, spend. That seems to be the theme of every ad you see on TV. Ads tend to take up about 20% of the TV you watch. Each one is trying to persuade you to purchase something you didn’t realize you needed until just now. Although most ads won’t have an effect on you, they represent the attitude of our culture: spend, spend, and spend some more. This can kill your reservoir of financial resources to help you plan for a rainy day. Luckily, you don’t have to be a victim to the “spend” mindset. In this post we’ll cover 6 secrets to help you prepare for a rainy day in the future.
In the coming months as you begin applying these simple secrets you may find that there are still months that you come up short and could use some extra money, in those cases there are several resources such as cash advances, auto title loans and other short term loan options. The important thing to keep in mind is to keep working at building up your rainy day fund so that you can have more financial freedom in the future.
Secret #1: Eliminate Debt
First, eliminate debt in your life. You can’t save money you owe to someone else. Your debts need to be paid off before you can start saving up for the future. If you have a horrible spending habit, learn to control it. Multiple credit cards should be cancelled (it’s better for your credit score if you only have 2 or 3 tops anyways). Pay off your cars. Pay off your mortgage. Don’t take out loans you don’t need. When you do need one, e.g. a payday loan, pay it off quickly. The longer you stay in debt, the more money you lose over time. Find ways to earn more money, pay off your debts quickly, and avoid getting into more debt unless you need them.
Secret #2: Budget Your Money
Second, budget your money. There’s no better way to save more money than to force yourself onto a monthly budget. When you carefully track your earnings and expenditures, you spend less. The idea of saving some of that money is more appealing than that third TV and surround sound when you can see your overall earnings.
Secret #3: Build Up Your Savings
Third, budget in a saving’s account for the future. It’s important to make a budget to manage your expenses (as you’ll spend less when you hold yourself to it), but you’ll also need to budget in an expenditure of a different kind: savings. Make sure you’re saving as much as you can every month. Pay for the things you need (which includes budgets for fun, leisure, and whatever you want to buy), but everything else should go into a saving’s account.
Secret #4: Become an Asset to Your Employer
Fourth, make yourself a more valuable employee. If you’ve been holding back on your work ethic for a while, bump it up to 110%. Bring your best work to the floor each and every day, even when the job is monotonous. Your endurance, strength of spirit, and consistent work will help you secure raises, advancements, and maybe even better jobs. When you become a more valuable employee, you become a good candidate to increase your earning potential. Even a simple $0.25 raise every 6 months will equate to $760 extra dollars every year. Imagine if you started jumping up in terms of dollars on a yearly basis. Hard work is rewarded in the business world. Whether your own job or a new one allows you to do it, you can make more money doing what you’re doing.
Secret #5: Build a Passive Income
Fifth, find a passive way to earn money. Some do this by renting space in their home, e.g. a basement. Others start a blog to vent all of their emotions (selling ad space when they become popular). Still others set up websites that provide real value or products, but essentially run themselves. The latter two ideas take a bit of effort to get running, but as soon as you’re established, the money will start coming in without very much work at all. Like becoming a more valuable employee, you can increase your earnings, and thus increase your savings.
Secret #6: Save Rather Than Spend
Sixth, save instead of spend your extra money. The fourth and fifth ideas talk about earning more money. The problem most families run into when they earn more money is the temptation to spend more. Since they can afford more fancy things, they purchase them. The true challenge is learning to continue with your budget from secret number 2 and then increasing the expenditures on secret number 3 (spending it on your future in a saving’s account). That’s the only situation where earning more money will actually help you save for the rainy day. Secrets 4 and 5 depend on it.
With these 6 secrets, you can begin saving more money every month for the unknown future. If you can avoid the “spend, spend, spend” mindset and focus instead of saving your money, even fluctuations in the market will have to work hard if they want to wear down your financial stores.