What's up, it's @hackedongrowth here, so let's be honest with ourselves: we all want to do better with our money, whether it's generating more money or building our wealth; it's all about the incremental changes we make along the path, and most people, sadly, will not follow these very basic five steps.
It reveals that 26% of individuals have no retirement savings and 36% have yet to start saving for retirement. The average American has just over $5,700 in revolving credit card debt, and the median net worth for persons aged 45 to 54 is just approximately $84,000, and yes, it took me long to learn everything and shoot it all in one take. So, basically, what I'm trying to say is that you should pay attention to this because they are all really easy things that you can start doing right now and adopt today to avoid being one of the numbers I just listed.
1. Don't blow all your money
Don't spend everything you earn now, this may seem obvious, but it was discovered in 2020 that the average millennial was spending 2% more per month than they earned. Because of this, it's critical to track your expenses and create a budget. For many people, the most effective way of doing this is to pay yourself first, so for every paycheck you receive, you will automatically put aside a certain amount.
2. Not to hold a large sum of money in cash
Invest the money and I started bringing it up because it applies to a lot of people who don't feel comfortable enough to invest so they just keep it in cash instead. The sad truth is that when you factor in inflation, your money actually loses buying power every single year that it's not invested. Considering that the average inflation rate is about 2% per year, this means that for every hundred dollars you save, it'll be worth about $98 the next year and It's also interesting to note that the SP 500 index fund has historically returned approximately 10% per year, or closer to 7% to 8% per year when inflation is taken into account, compared to a negative 2% loss from putting your money in cash every year.
3. Keep your credit card balance as low as possible
This is the worst misuse of money ever sure I'll just put it on my credit card I'm never going to pay it back anyhow when you consider that the average interest rate is sixteen point one five percent and the typical American has 5,700 dollars of outstanding credit card debt that means they're spending 920 dollars per year just on credit card interest now get this instead of spending 920 dollars per year on credit card interest So, would you rather pay that to a credit card business or would you rather have that money sitting in your bank account so you can go out and purchase a Lambo?
4. Keep an eye on your credit score.
It's very simple to ignore your credit score, and many people just don't care, but paying attention to it and improving your credit score might save you tens of thousands of dollars when you go to purchase a house, a vehicle, or a business loan, so here's what you should do.
5. Not to put money into something you don't completely understand
If you don't fully grasp what you're investing in and the possible dangers with it, it's incredibly simple not to invest in it until you know. This is how many individuals make highly risky judgments with their money by investing in something they don't fully grasp then worrying and becoming upset every time it falls because they don't fully understand the dangers and long-term outlook of what they're doing even when investing in the stock market, even though it has historically performed around 10% per year, there may be years when it makes 20% and years when it loses 15% knowing that this is part of the investment model understanding that this is typical and being cool with it is part of being a smart investor and managing your money
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