6 Simple Rules to add on your Journey to Financial Success
- Rey Manasse
- Nov 20, 2019
- 3 min read
Updated: Dec 28, 2020
No Car Payments
That “brand new” car has already lost value the moment you drove it off the lot. The sole purpose of purchasing a car is to take you from point A to point B and buying your “dream car” or an expensive car early will cost you approximately $200-$350 in car payments. Instead purchase a car that will cost you eight thousand or less and pay it off within 12 months rather than the time given. Aim for a four cylinder vehicle which will save more on gas in the long run. It’s important to realistically understand the cost of owning a vehicle. The money you would’ve been spending on that expensive car is now in your savings that can be used for an emergency, invest in yourself, potential business venture, and assets that can grow.
Avoid Student Loans
If you watched college movies or shows growing up, chances are you would love to experience drinking, attend parties, and having fun with a specific age group without adult supervision. Let’s be honest. Young teenagers would love to be away from parents to enjoy the next 4-6 years in college rule free. Average tuition may cost students up to $10,000 per year including room and books. As years pass by the interest rate will increase tremendously. Instead consider enrolling in a community college for the first couple of years.
Credit
To have any success in the lending world you must understand and be disciplined when credit is involved. You may want a loan to purchase a car or fund your first small business. It’s also important because you may want to purchase a house. It’s to let lenders and creditors assume clients know how to manage money and that it will be paid off going forward. Upon being hired, employers run credit checks on potential employees to determine whether they’re reliable, responsible, and trustworthy. Use credit as leverage.
Buying a Home
Ever heard someone say “buying a home is an investment?” Well that was a lie. Yes, a mortgage can be cheaper than renting but Principal, interest, Mortgage insurance(if down payment is under 20%), property taxes, HOA, home insurance, and utilities must all be considered into your monthly payment. Failure to do so can result in foreclosure which will stick on your credit for a few years. Purchase a home that will create passive cash flow which may include Airbnb, renting, and other creative options. Understanding the home buying process can save you thousands and could be vital for someone interested investing in Real Estate. Maintaining a vehicle and buying a home to live in as a primary home are liabilities. It depends on what you do with it. Please view https://money.com/best-home-insurance/ for more information.
Dining out/Non essentials
It’s one thing to dine out and eat overpriced or unhealthy foods. Non essential items include cable, music streaming, subscriptions such as Netflix, Hulu, HBO, and other TV streaming services. Think about it, calculate, and refer back to your statements. Calculate the amounts you’ve spent on dining out, personal grooming, cable, and subscription services. Instead you should learn how to cook and avoid processed meals. Cancel the $150 monthly cable bill and keep it down to $15 a month with Netflix or another subscription service. Invest in books and healthier food options that will benefit for the future.
Getting Married
Get married in court and keep it moving. Expenses from wedding includes reserving a church, hiring a photographer, event planner, and food as well as music. In 2019 the average wedding was about $30,000 or more and the average ring was approximately $5,000 or more. That’s equivalent to the price of attending college. Interesting enough it’s expensive to get married and to get a divorce. Instead obtain a marriage license and pay $150 or less and get married under 90 days. Skip the ceremony, sign the marriage certificate, and avoid debt. Before you actually have a wedding consider saving and investing in a business, down payment for real estate, and focus on your dividends so your stocks can grow. Begin the journey debt free. The whole point is to build for the future together and grow as a power couple.
Assets over Liabilities
Sacrificing an expensive lifestyle for a more frugal one is a huge financial gain. If you can’t buy it twice you actually can’t afford it. Stay down until you come up.
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