Making smart financial decisions is a must if you want to have faith that your future is going to be full of wealth and joy. Money doesn’t bring happiness, but it can certainly help you to live a life of your dreams and support your goals. With this in mind, below we have 5 smart financial decisions that everybody should make. Take a look and see what you can decide on today to help shape a better future.
#1: How Much Money to Put in an Emergency Fund
An emergency fund will give you peace of mind, if nothing else. However, having one there can also be a huge help if you suffer an emergency, perhaps an unexpected medical expense, or the breaking down of an important appliance. It’s also crucial for other things – what would you do if you had to take a pay cut, or you lost your job? If you didn’t have any money behind you, the situation would likely be pretty dire.
Figure out how much to put into an emergency fund by working out around 6-12 months of expenses and aiming for that. Most experts say that this is a safe place to aim for.
#2: What Investments to Make
Investing is more important than saving. Once you have your emergency fund, you should not be saving anymore. Why? Because over time, your money depreciates. It’s far smarter to make investments, which will help you to build wealth well into the future. However, it’s all about setting it and forgetting it. Places like City index can potentially help you to begin investing if you don’t know where to start. However, it’s so important to do your research, as you want to make the best decision for your money.
#3: How Much You’re Going to Make to Create Financial Independence
Who wouldn’t want to be financially independent given the chance? Work out how much you’d need and then come up with a plan. It’s probably much less than you think. You can consider yourself financially independent when you can cover your bills and living expenses without having to work. If you can cover a little entertainment and luxury too, then that’s even better! You don’t need thousands upon thousands to do this, either. Once you have financial independence, you can spend your time doing the things you really love, rather than focusing on swapping your time for money.
#4: To Purchase a Home or Not to Purchase a Home?
Purchasing a home appears to be the ‘done thing’ but it’s important to note that it isn’t for everyone. For some people, renting is totally fine, and makes far more sense. Buying a home involves parting with money you’ll never see again, and a hell of a lot of fees that you can lose if a deal doesn’t go through.
#5: Where to Live
Considering your dreams, how you want to live and the money you want to make, think about where you want to live. You’re never stuck in the same place unless you want to be. Moving could open up a whole world of opportunities!