How to prosper financially? Was the objective I focused on last Saturday in a webinar I gave on Financial Coaching to a good number of people located.
Acquiring Financial Education seems to me a necessary task for everyone, since we continually have to make decisions about our finances and personal economy.
That’s why in this post, I will give you three important keys so that you can begin to become aware of them and start applying them in your daily financial management
As I always say, having financial education is necessary and important because you come into contact with money every day of your life. Therefore, if you don’t have clear ideas and concepts, it will be very difficult to have adequate and prosperous financial management.
There are three key points around which your finances revolve:
1 Income
2 Expenses
3 Savings and Investment
I imagine you already know the meaning of these three, but the important thing is that you apply them as efficiently as possible in your financial management.
Income:
It is vital to have income to spend, because otherwise, you know, we’re in trouble. That’s why focusing on income is of vital importance.
To have financial prosperity, it is essential not to have only one source of income, as this is a real danger to your finances. If that tap turns off for whatever reason, you have no more money unless you have a good savings cushion to soften the blow.
You need to find a way not to live solely off one source of income.
Expenses:
The main enemy of your personal finances…
One danger is what happens to most people: spending more than they earn.
If they earn 1,800, they spend 2,000. Their salary increases to 2,100, and they start spending 2,200. Then they manage to increase their salary to 2,300, and their expenses rise to 2,400… and so on.
You have to learn to determine how much you need to live adequately per year or month because once you define this, your expenses won’t change, no matter how much your income does.
Another dangerous element for your personal finances is letting your emotions guide your spending
Many people have toxic, emotional spending habits and take out loans for things that aren’t essential. This is where Financial Coaching comes in, addressing these issues with tools that help eliminate toxic habits and replace them with healthy ones.
Saving and Investing:
This combination is the engine of your financial prosperity. When your income is consistent, coming from two or more sources, your expenses are regular and controlled, and emotions don’t dictate your finances, you’ll have reached the point where you can save consistently.
And when you save, you can then look at investment opportunities, whether in real estate, businesses, projects, or financial markets—it’s up to you.
Financially prosperous people are those who have more than one source of income, have meticulous control over their spending by sticking to their budget, don’t let emotions dictate their financial decisions, and are concerned with saving and investing to generate further returns
Remember that the process consists of first becoming aware of your current financial situation, and then creating a plan to improve the things you’re not doing well, so you can get started on your path to financial prosperity.