So, you want to be rich? Today break these bad money habits start
Establish good fortune need financial habits, foundation like regular savings and adhere to the budget. Bad financial habits, on the other hand, can prevent you never walk in front. If your ultimate goal is to become rich, there are four financial habits, you need to immediately break.
1. You are carrying credit card debt
All the debt is expensive because you have to pay back interest on the amount you borrow, but credit card debt is among the worst type of debt because interest rates are so high. If you owe a 20% annual interest rate on the card of $ 5,000, can only afford to pay $ 100 per month, it would take you to pay it back in nine years, you will eventually borrow more than you pay more interest on the principal amount. That’s assuming you do not accept any more cards during this period.
Once you deep into credit card debt, very difficult to get out, so you’d better avoid it completely. Never charge more to your credit card you can completely pay back more than you know in the end. If you are already in debt, create a plan to down. Figure how much of your monthly income, you can repay the debt at a time and pay your debts Rao, a card. Do not forget to repayment of all people pay at least the minimum, though, in order to avoid late fees and penalty APR.
2. You throw a lot of money in the purchase of light far
Spend an average of Americans eating out more than $ 3,000 per year, according to the Bureau of Labor Statistics data. And this is just the restaurant and takeaway. People often do other unnecessary purchases, including drinks at the bar, subscribe unused, high-end clothing.
It is good to treat yourself occasionally, but if you do not think about how you have fun spending affect your long-term financial goals, you can set for yourself seriously. You can budget for dining out by a fixed amount, and entertainment you desire to limit discretionary spending. This should not take up more than 30% of your monthly income. The lower you can keep this number, the faster you can achieve greater financial goals, such as to buy a house or save for retirement.
3. You’re not saving a priority
It is common for most people to pay and → put any money they have left to save, but if you really want to make sure your basic life, increase your assets net, energy demand is your first task costs are included.
There is a rule about how much money you should save each month is not exactly followed. It depends on your financial goals, how much money you need, how much time you until you need to draw on the money. Created for each plan your financial goals, you have a list of how many months you need to save it. Then the total cost divided by the number of months to figure out how much you need to save each month. If you intend to invest some of your money, then you should not need to save as much coverage your goal because your investment should gain value over time. In this case, the use of retirement calculator or a similar tool to help you determine how much to save each month to hit your target.
If you can not save as much as you want, just save as much as you can and increase your savings every time you get a raise ratio. Put any extra money, like a tax refund or annual bonus, your savings, and
4. You do not invest
Savings account is a great place to keep your money, if you want it to need in the coming years. However, if you save money long-term goal, such as retirement, you should not invest it. The average savings account interest rate is only 0.09% APY of. This is your money in growth, which is the date of Ë account. Inflation, on the other hand, has always been to grow at a rate of 3% per year. So save money in the long run will actually lost the value of the cost of living as a driver of inflation.
You can invest your money to beat inflation. Always return to share every year between 10% and 5% and 6% on average, and even key has always been every year. Have done your investment will automatically grow at this rate does not mean that money because investment performance can fluctuate. But the odds, if you spread your investment, do not panic sales due to fluctuations in short-term value of your investment are good, you will increase your money over time. If you do not know how to invest the money from your own financial adviser, ask for help or use ROBO-advis or that can help you assess your risk toleranceForce, and select the right investment for you.
If you really want to be rich, you must be able to take control of their financial situation, and understand how every decision you make affects your short and long term. By avoiding four errors listed above, you can start your net worth grow and achieve your financial dreams.