Should I start a new job, buy this new outfit, or purchase this house? Decision making is a pretty crucial task, especially when it relates to your personal finance. Even if you make the right choice at that time, are you certain it will benefit you in the long run? There are some decisions that you can never go wrong with. Read on to know what they are!
- Automate your Savings
Save money without knowing that you’re saving it. Sounds cool, right? That’s what automation does. There are plenty ways to automate your finances. For instance, you can establish automatic drafts from your deposit account to your savings account. This way, you’ll get a fixed percentage of your savings going into your savings account automatically. No matter how much the savings might be, they’ll certainly make a great difference in the long run. Moreover, you can sign up for an automatic draft for paying your bills. You will have to worry less about doing all the math and getting your bills paid on time. This method works well if your bills and savings are consistent.
For automation, start off with a small percentage of your paycheck, and if you feel confident, you can always increase the amount.
- Buy your Place instead of Renting it
While it’s cheaper to rent a home on month-to-month basis, renting does not provide long term benefits. When you pay a monthly rent, you get closer and closer to the price of the house, so why not buy it on mortgage. Homeowners enjoy perks like financial security and stability. On the other hand, if you’ve other priorities like saving money for a down payment, renting can be a wise option. Furthermore, in extremely expensive markets, renting is better because cash buying can cause a financial instability, as you have to pay a large sum of money all at once. If that’s not the case, it is preferable to buy your house.
- Don’t Compromise on Vehicle Maintenance
Taking care of your vehicle is a low-key investment. When you repaint the exterior of your car, fix the upholstery inside, check the mileage and keep it regularly serviced by a mobile mechanic, you’re actually maximizing its value. The wear and tear of your vehicle is inevitable, but if you strictly maintain it, you can minimize the depreciation rate. Treat your vehicle with respect and it may give you more money than your expectation on selling.
- Keep your Retirement Withdrawal at a Safe Rate
To make sure you don’t disturb your retirement savings, it’s always recommended to withdraw no more than 4 percent from it per year. This is a simple rule of thumb to keep your retirement withdrawal in check without endangering your savings.
Another long-term benefit you can get from your retirement funds is investing a part of it to purchase an annuity or setting up any other insurance to gain more income in due course.
- Invest while you Still Can
No matter how much money you have, it won’t double overtime until you do something about it. The best way to multiply your funds is by investing them in the right place. And while you’re still young, you have more opportunities open to you.
There are different levels of investing. If you can’t take the business pressure, opt for the lowest investing level i.e. bonds. Those of you who are more daring can go for stock investments, mutual funds and joint ventures. The key is to handle the business heat with clever strategies and not afraid of taking risks.