2020 has been the most life-changing experience for most of us.
We were put into the most uncomfortable situations both financially and otherwise. But at the same time, we got the freest time of our lives that we spent with our families reviving hobbies.
While the year was a rollercoaster ride, it did teach us a lot.
Personally, for me, I have some major financial takeaways from this year. And as we approach Christmas, I thought what better way to wish you all Merry Christmas while I share these learnings.
So here I wish you a Merry Christmas while I share my thoughts:
5 Financial Tips To Remember This Christmas Day
1. Rainy Days Are Blindsiding
When 2020 begun, nobody knew we would be under lockdown for an absurdly crazy amount of time. The economy will crash, and so much that is happening now will happen.
But it happened, and the only way to combat such situations is to have an Emergency Fund.
An Emergency Fund could be anything that can cover your living expenses for 3 – 6 months; I know it may seem a bit too much. But trust me, you will thank yourself for this.
It helps you to buy some buffer time for yourself to figure out your job, business, freelance life etc.
So pandemic or no pandemic this is a good financial practice to follow in life.
2. One Is Not Enough
You may have heard about having multiple streams of income at least once, and it may have sounded too much.
But truly one stream of income is not enough.
Covid has made us realise that if you are dependent on only one stream of income to sustain yourself, then you are failing big time.
Because if that stream of income isn’t able to pay for you any longer, then you will fall off.
But if you have two or three income sources, then it will be a lot easier for you to manage yourself even if one income stream is not working any more.
So start building multiple income sources and boost your financial stability. Some ways that can help you make money monthly or even daily are here.
3. Save More, Spend Less & Invest Wisely
The heading itself is quite self-explanatory but living by it is what is difficult.
So a little tip here is:
The 50/30/20 rule.
The rule says that you should spend 50% of your income on necessities like food, shelter and education. Spend 30% of your income on wants like travel, shopping etc. And save the balance 20% of your income.
This rule, however, isn’t a one size fits all approach.
People have varied responsibilities and priorities, and so you can tweak this rule and make it your own based on the same. If you have fewer obligations, then you can increase your savings %age and reduce your spendings and vice versa.
4. Set Financial Goals
Setting financial goals basically means to have income and investment goals.
But the most common mistake that people make here is that they set big goals for broader time frames and hence get lost in the journey.
While it is important to have big long term goals, it is equally important to break that big goal into smaller goals. Breaking them down into smaller goals ensures that you are working every day towards a short term goal which will accumulate and contribute towards your long term goal.
Let’s say you have a yearly income and investment goal so rather than working towards a yearly goal, break it down into small monthly goals and work towards it.
If you fail to set these short term goals for yourself, then you will always find yourself shrugging off working towards it every day and eventually you will not be able to achieve your goals.
5. Evaluate & Re-Evaluate Your Strategy
Putting together a financial plan/strategy is not a task to do just for the sake of it. It should be something that you should constantly work towards until you get the best plan for yourself.
I have made this mistake, and I don’t want you to do it, I use to jot down a plan and never care to look back and evaluate what’s working and what’s not.
But from now on, I am going to change that and take some time to evaluate my strategy and develop the right plan for my self. And I would like you also to reconsider the plans and strategies that you are using.
Are they actually working? Do I need to change something? Ask yourself these questions.
I Hope This Was an Insightful Christmas Greeting!
So these were a few of my learnings that I feel can help you achieve financial stability.
And with this, I would like to encourage you to continue this chain of thought with us on Twitter (@CoinSwitch Kuber) or Instagram (coinswitch_co) and share anything that you feel can help people to grow financially.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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