We’re all so focused on our health these days, but we often overlook one very big elephant in the room…..our finances.
The state of our finances has a huge impact on our wellbeing, on how we spend our time and on the quality of life. So why is there not more of a focus on educating people around financial literacy? That’s something I’ve been doing now for 10 years.
Our financial literacy means having a clear understanding of your financial situation, being able to meet your daily needs, planning for the future, and, ultimately, using money to free up your time.
It’s not just about having money; it’s about managing it wisely, avoiding excessive debt, understanding how to grow your income and planning for the future to allow you to spend most of your time on things that you find meaningful and enjoyable.
A lack of financial literacy quite literally costs you money – it prevents you from seeing financial pitfalls and allows you to take advantage of opportunities to earn more.
Achieving and Maintaining Financial Wellbeing
Whether you’re just starting out on your financial wellbeing journey or looking to refine your financial habits, the 10 points below will guide you towards a more empowered and prosperous future.
- Pay Yourself First
The cornerstone of financial security is saving. Start by saving at least 10% of every pound or dollar you earn. Automate this process with a bank transfer, ensuring that saving becomes a non-negotiable habit. As you grow more comfortable, challenge yourself to increase this percentage every quarter. The goal is to push your limits and make saving a significant part of your financial routine.
- Build a Safety Net
Financial stability requires a solid safety net. Maintain a buffer of 6 to 12 months’ worth of living expenses in liquid cash. This is your financial cushion that should never be put at risk.
- Keep Debt in Check
Aim to keep your debt-to-income (DTI) ratio below 10%. This means that the total of your monthly debt payments should be less than 10% of your gross monthly income.
- Eliminate Non-Productive Debt
Before you start investing, focus on paying off any non-cashflow-producing debt. This includes credit card debt, personal loans, and other high-interest liabilities.
- Increase Your Income Annually
Every year, work on increasing your income by packaging products or services that you are passionate about. The key is to find something that inspires and fulfils you, making it easier to deliver exceptional value.
- Invest in Yourself
Dedicate 10% of your personal income to books, courses, masterminds, and mentorship. Similarly, allocate 10% of your business income to research, development, and testing. These investments in growth will sharpen your skills, expand your knowledge, and open new opportunities.
- Avoid Financial Pitfalls
Avoid schemes, scams, fads, gimmicks, stock tips, lottery tickets, gambling, and other “easy money” traps. Always do the math and make decisions based on what truly inspires you, not just societal norms.
- Set Boundaries
As much as you may want to help, loaning money to loved ones can lead to financial strain and damaged relationships. You’re not a bank, and if someone can’t secure a loan through traditional means, it’s a red flag. If you must lend money, do so with the understanding that you may not get it back and that it could affect your relationship.
- Invest with a Long-Term Perspective
Investing is about long-term growth. Develop an investment strategy with a 100+ year outlook, thinking about the legacy you want to build for future generations. If you’re unsure where to start, a simple yet effective strategy is to buy the whole market monthly through index funds or ETFs. This approach minimizes risk while allowing you to benefit from the overall growth of the market. However, you must do your research, learn (from reputable people) about the markets and different investment tools and make sure you understand all of the risks involved before making an investments.
- Practice Fair Exchange
Money is a tool for fair exchange. Whether in your workplace, business, community, or home, always strive for fairness in your transactions. Don’t martyr yourself by giving more than you receive, nor should you seek rescue or charity. Instead, focus on serving others and ensuring you receive fair remuneration for your efforts. This balance is the key to sustainable financial success.
Living an Empowered Life
These ten steps are a mindset—a way of approaching your finances that leads to empowerment and freedom.
Financial success isn’t about how much you make but how effectively you manage what you have.
Live by these principles, and you’ll be well on your way to an empowered and prosperous future, full of financial wellbeing.
By Jason Graystone
Get a copy of Jason Graystone’s new book ‘Always Free’ HERE and learn more about his work at https://www.jasongraystone.com/
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