Personal Finance: Your Roadmap Towards Creating Wealth and Financial Literacy

Chapter 9 Blueprint for Financial Success Financial security and independence are like a three-legged stool resting on savings, insurance, and investments.-Brian Tracy Some life changes are predictable, while others can be unexpected. Some of these are natural disasters, like earthquakes. Others can be triggered by events that happen far beyond our expectations. Here are some common tips that apply to all types of life changes: -Stay financially fit. Being in good financial condition will help you endure the challenges of competing in an athletic environment. Having a healthy and balanced diet will also help you avoid experiencing weight gain and other health issues. -Changes require change. Change is inevitable. Though you are in good financial shape, a significant life change may require reassessing your financial strategies. It might also affect your ability to manage risk. Be adaptable to changes. -Don't procrastinate. Don't postpone things most especially if they will contribute to your goals and dreams. Act immediately. Having a significant life change can be costly. It can also lead to unforeseen expenses. Not planning for a meaningful life change can be very expensive. In addition, it can create issues, such as not having the proper insurance coverage or managing your debts. -Manage stress and your emotions. When dealing with stress and other emotional upheavals, don't make snap decisions. Instead, learn to manage your emotions and become fully aware of them. Proper advisors can help you make informed decisions, but they may not be in your best interests. Don't decide when you are emotional. It will bring you in the wrong direction. Here are the significant changes you may have to face in your life. I wish you more strength and good changes. Getting Started It's good to have graduated from college or even entered the workforce. However, many young adults still face financial difficulties due to their lack of discipline and poor habits. Consider the following to get on the path to financial success: -Use consumer credit wisely. The use of credit cards can cause long-term financial problems if mismanaged. Young workers should avoid carrying credit cards and make purchases with debit cards instead. Doing so will help them get off on the right financial footing. -Master the skills in saving and investing. Saving and investing will give you the desired amount of money you need to accumulate in your retirement accounts that offer tax advantages. I am often asked, "What is the desired age to save and invest?" I like to answer, "Well, when I have teeth to brush, I should start doing so." The earlier, the better. Now is the time to start saving! -Get insured. Young people tend to underestimate the financial impact of unforeseen expenses. Whether it's due to an accident or a long-term illness, getting insurance can help minimize the financial burden of these unexpected events. When you start a new job, it pays to consider buying disability insurance. It can replace the income that you lost due to a disability, and it can also help preserve your assets. -Continue your education. After you get out of school, think about how much you learned in school that can be used in the real world. After you've worked, you realize that you didn't get enough in school. School may not always be the best option for everyone, especially those who can't afford it. But if there's a chance, grab it. Your learning should be continuous. The good thing is that you can learn from your experiences and the experiences of others. Find mentors you can lean on. Read their books if they are authors. Learn from them. Master the skill of "unlearning" and "learning." Unlearn the obsolete knowledge and learn new things. Be a student hungry for knowledge all the time. Finding for your passion/career During your adult life, you'll probably change jobs. It's not uncommon for people to do so several times a decade. Even with the steady decline in job security, many people still believe that they have job security. This is not true. Being prepared for a job change can help you feel more secure and at peace with the world. Having this idea can also help prepare for the unexpected. -Organize your finances to afford an income fluctuation. Structure your finances to avoid a short-term income dip. It's important to set aside a portion of your income to pay off debts and maintain a budget for emergencies. Many people see thriftiness as restrictive, but it gives them more freedom to do what they want. In addition, having an emergency reserve fund can help ensure that they have enough funds to pay for unexpected expenses. You have to review your current spending patterns to ensure that they're not going to drag you down. This will help avoid making the same mistakes that cost you and your goals in the first place. -Evaluate the total financial picture when relocating. Before you decide to move, take time to analyze the financial picture of the move. It's important to understand the various aspects of your action, such as income, salaries, benefits, and the cost of living.