The Life-Changing Power Of Going On A Financial Diet
Many people go on a physical diet, but have you ever gone on a financial diet?
It is common for people to go on a diet. It is uncommon for people to go on a financial diet. Here is a look at the life-changing power of going on a financial diet!
What Is A Financial Diet?
A financial diet is similar to a physical diet. Set a goal for expenses, saving, and investing over some time. Aim to reach your financial goals just like you would have a health goal on a regular diet.
Develop Better Financial Habits
Being on a financial diet is a time to focus on developing better financial habits. Start to pay attention to your bills and when they are due. Make sure to pay off the credit card every month to avoid going into credit card debt.
Start by paying off any debts that you may have. You can then begin to better keep track of spending habits.
Be Mindful Of Your Spending
A financial diet can help you to be more mindful of bad spending habits. While on your financial diet, review your credit card statements and receipts for ways to save money. Create and follow a budget. If you have never done a budget before, starting on a financial diet is a great way to begin!
A basic budget is the 50/30/20 budget. The 50/30/20 budget breaks down to 50% for necessities, 30% for wants, and 20% for savings.
Needs include:
Housing (rent or mortgage)
Utilities
Transportation
Groceries
Insurance
Wants include:
Subscriptions
Memberships
Clothes
Going out to eat
Alcohol
Entertainment
Save money:
In a high-yield savings account
In a money market account
Certificate of Deposit (CD)
Build an emergency fund
Invest a portion of it into the stock market and other financial assets
Put money away into retirement accounts
Mindful spending and beginning to follow a budget is the first step to getting your financial life in order. As you begin to stick to a budget, work to cut away extra fat in your financial statements.
Trim Away The Financial Fat
Trim away any extra financial fat. Become financially lean by canceling any subscriptions that are not being used. You may even cancel subscriptions you use to save extra money.
Stop going out to eat. Stop going out for drinks. Stop spending a lot of money on alcohol. Taking a break or stopping doing these things can help see how much money is spent on frivolous things and activities.
Trim away the fat! Make your financial statements lean. Direct the money that would have been spent on drinks and subscriptions to increase the amount of money in your savings account.
Just trimming away the extra money spent between monthly subscriptions to alcohol can help you save more money.
Begin To Save More Money
Use being on a financial diet to start to save more money. You can save money by simplifying and listing out all of your expenses. Automatically direct a portion of each paycheck into a high-yield savings account. This helps to take the thinking out of beginning to save money.
Start to invest money in retirement accounts. Be sure to invest the maximum amount into your 401(k). After the 401(k) is maxed out, save money into an individual retirement arrangement (IRA). Try your best to do this every year.
Save for a health emergency. You never know when or what will happen. Healthcare is expensive. Save money in a health savings account (HSA). Along with a health savings account, create a specific high-yield savings account that is never touched except for medical emergencies.
You will begin to feel more at peace by having money saved away. Knowing money in retirement accounts can also give you peace of mind.
Invest More Money
Rather than spending money, start to invest more money. One of the most popular investment strategies is investing in the stock market. Investing money in S&P 500 index funds is among the most popular strategies. If you want to build up passive income, investing in dividend-paying stocks is another option.
Make a habit of investing a certain percentage of your income into the stock market each month. You can then learn ways to make money outside of the stock market.
Build Financial Strength By Increasing Your Income
Bulk up your bank account by investing in skills, certifications, and knowledge to increase income.
Figure out what requirements are needed to move up in your career field. Companies will likely require specialized certifications to move up to another position. Look up people on LinkedIn at the top of your field. Understand what type of experience and certifications they have that allowed them to reach the peak of their career field. Read online to understand better what steps must be taken to advance in your field.
In the knowledge economy, knowledge truly is power. However, knowledge must still be applied by creating content. You are then responsible for finding ways to generate income streams with the content you create. Some ways to make money in the content economy are:
Advertising revenue
Subscriptions
Selling a product or service online
Master a skill. Learn new skills. Keep repeating until you have honed down a series of interconnected skills that make you stand out among your competitors.
Secure Single’s Algorithm recommends:
Summary
A financial diet is a way to review your financial life. Similar to a traditional diet, work to streamline and decrease expenses to allow yourself to save and invest more money. Rather than spending money on foolish things, work to increase your income by investing in financial assets.
Become a secure single.
How could a financial diet help you reach financial goals?
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