If you’re reading this right now and you’re broke or you’re struggling financially, then this is probably one of the most important articles for you to read. I really hope that you read this till the end and maybe read it a few times, over and over again. After you’ve read it, it’s important that you apply these tips and recommendations, even if they mean that you’ll have to do things differently than how you’re doing them right now. Although you might not like the changes I’m going to offer, believe me that these changes are for the better. After all, whatever you are doing right now, doesn’t seem to be working out for you, right?
Let’s talk about what you would do if you’re struggling financially and by the way this is some advice that I would give myself ,because there was once a time in my life where I was broke and struggling financially. I was living on my friend’s couch and had a lot of credit card debt. I was barely surviving and I was able to get myself out of that situation to where I am today, and it’s because of these steps that I went through and I wish I knew them a lot earlier because I would have gotten myself out of that situation a lot faster.
So I created a plan for myself that would get me out of that situation, and allow me to be able to change my life for the better and that’s what I want to share with you guys. So I’m going to give you the following tips and steps of what I’d do and what I would recommend.
Vehicle for making money
I don’t mean a vehicle like a car, I’m talking about a vehicle in the sense of a job, a business, or whatever it might be for making immediate short-term money. So for a lot of you that are reading this right now, if you’re broke or struggling financially, my my number one answer would be for you to get a job. A job is the sort of vehicle that can immediately start making you some money. We don’t care what kind of job it is, but it has to be something that can provide for you immediately. A lot of you might think that starting your own business is a great idea for making immediate income, but the reality is that this is the worst thing you can do right now.
The reason I say this is because a business will take a lot of time and money, and it may not pay you back immediately. Getting a job will give you the foundation that you need in order to sustain yourself while you learn and plan for building a business in the future. Now if you already have a business as your job, then you’re ahead of the game, continue using this as your vehicle for making money and continue to the next step.
Manage your finances
Step number two is that you have to learn how to manage your finances. You have to learn how to manage it because now that you’re making money, what you do with that money is really the most important thing. If you’re reading this and already have a job, then you know how that even if you’re making money, not being able to manage it can lead to spending money in places where you don’t need to spend.
Track your income and expenses
I used to have a ritual, where every single week I would pay off everything through credit cards, or my debit card and then what I would do is, every single week I would go through my bank accounts, credit card statements, and I would keep a spreadsheet that I would use to track all of my expenses and categorize them into different sections, such as rent, car payment, gym membership, cell phone payments, groceries, and eating out.
By doing this every single week, it would help me learn to see where I’m spending my money and ensure that I’m actually spending less than what I’m making. You have to have that awareness because that’s really what tracking does for you, it gives you awareness, and to know where your money is going. This changed my life just by doing it, because what I was doing before was just spending money blindly without keeping track.
Budget your monthly income
Once you know what your income is, and what your expenses are, you’re going to have to budget. You are going to make sacrifices as I said in the beginning, by cutting out unnecessary expenses. If you have a cheap car that you can’t afford to maintain, you can do things like selling it, and using public transportation instead. If you have monthly subscriptions such as Netflix, cut those out. This is a commodity and not a basic need.
So when it comes to managing finances, here’s how you’d want to allocate the amount of money that you make;
- 55% of whatever you make, should go to necessities. These are your rent, your utility bills, your food, your car or your transportation, etc..
- 10% should be put towards long term savings. You have to put money aside, so that you’re building up a reserve or emergency fund. Oftentimes you get in hard situations and you’ll find yourself without an emergency fund. You should have a minimum of 6 months of your monthly earnings saved up.
- 10% should be used for investment. Invest in something like crypto-currency or stocks. Put money aside for this, by investing in things that will slowly return money back to you.
- 10% should be used for education. You have to invest in yourself by educating yourself and learning about different things, such as business, money, etc.. We suggest taking online courses on platforms like udemy.com, etc…
- 10% should be put towards fun. You gotta have some fun and enjoy yourself. You’re going to get more fun out of your life by putting money aside and then being strategic about how you want to use that money.
- 5% should be donated. Contribute beyond yourself, this way you train yourself to live in a state of abundance. Make it a habit, whether you give a homeless person a dollar, or buy something another person in need. People often get so attached to the money that they’ve got and are afraid of loosing it, and they try to hold on too it and don’t open themselves to making more.
Make some sacrifices
Sacrifices was actually a huge change in my thinking, because when I was trying to get myself out of this situation, part of the reason why I was still stuck was because I wasn’t willing to make sacrifices. I thought that I can have it all and live this balanced lifestyle and whatnot, so I decided to interview a lot of people that were more financially successful than me and one of the common things I found out between these people was that they all had to make sacrifices to get where they are today.
Invest in yourself
Warren Buffett one of the richest men in the world ,has said the best investment you can make is not in a stock or a mutual fund or a real estate, it’s in yourself, investing in yourself and I really believe this has been the key the secret to getting me to where I’m at right now.
We recommend that you invest in yourself and getting something like a coach or doing a 100 Day Challenge program. You will get so much value from just investing in yourself. You’ll find that the investing in your training or seminars, you will experience so much value because the hard earned money will be getting put back into yourself.
You’re gonna create a new vehicle for not just making money, but for financial freedom and financial abundance. The first vehicle is not gonna get you there, because it’s just a job and it’s not going to give you the freedom because here you’re basically trading your time for money, but now you’re in a better position where you can really look at creating wealth and you can look at an online business or investing online. Take this step seriously and build it up to where you want it to go.
We suggest either learning how to invest in stocks or real estate, or some other vehicle like that. This has the potential to create financial freedom using passive income. This means that you’ll have steady income coming in by not doing much. This will give you back a lot of the time in your day to enjoy doing whatever you want.