5 Rules To Live By For Lifelong Financial Security

It doesn’t feel good to be constantly worrying about money. You want financial freedom, everybody does. But it is not something that many can achieve because in the midst of our daily hustle and bustle, our brains easily go on auto-pilot when we handle money. We think in terms of now, rarely in the future. We overestimate our ability to control our impulses and end up spending according to our whims and fancies.

Managing money can be simple. Why not try living by these five simple rules to keep yourself financially secure in the long term?

Count Dollars Like Calories

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Research has shown that people who keep a food diary are more successful in losing weight and keeping it off than those who don’t. Usually, this means writing down what you have eaten, habitually and without fail.

The same is true of tracking your expenses. Most people have no clue where their money go each month, especially their cash. Tracking works. Whether you do it using the old school way of pencil and paper, a website or a mobile app, just do it. We know of others who have done it and led financially carefree lives. It will transform your life.

Emergencies Will Happen

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Financial emergencies are not called emergencies for nothing. It means that you will be caught unaware when it happens, and not like a storm you can anticipate from miles away. Your car will break down, your computer will crash or one of ten thousand things will go wrong. You need to have money for when they occur to be ready and overcome them like water off a duck’s back.

Save For Something You Can Visualize

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We bet you’ve tried convincing yourself to save some extra money each month. It didn’t work too well, right?

Now try telling yourself to save some extra money each month because you want to go on a vacation to Europe, or even specify which part of Europe you’d like to explore.

It’s significantly easier when there’s something you want at the other end of the savings. And remember: It’ll be easier still if you visualize the goal. It can’t be something arbitrary like “retirement’ or even “retirement house”.

If your plan is to save to invest in a specific ETF or REITs you think you will hold for a long-term (at least 5 years), make it clear to yourself. If you want a swanky retirement home, be specific too. Maybe think of a waterfront penthouse with your yacht parked nearby. Isn’t that better?

Read Also: Giving Up Luxuries To Live A More Comfortable Life In Singapore

Just Because You Have A “Coupon” Doesn’t Mean You Should Go Shopping

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There’s a four-letter word that can capture people’s attention: S-A-L-E. You’re more likely to fall for this marketing trick when there’s a big price gap between the original price and the discounted price. It is even harder to resist when the offer is for a limited time only (or even the “today is the last day” technique).

You lose the battle with the retailer, even more, when you’re paying with imaginary money (aka a credit card). Getting your card swiped and having your purchases handed to you is like receiving a trophy and it feels like you’ve won.

The problem is, although there are times that’s true, sales lead you to buy things you neither really want nor really need. Even when it’s 50% off, it’s still 50% on. If there wasn’t a discount, you simply wouldn’t be buying it, so you actually spent more than you intended to. You lose.

Free Can Actually Be Expensive

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Our parents have always said, “There’s no free lunch in this world.” They’re right. There is a cost to everything. If you can’t quantify the cost in dollars, you have to measure it in time.

For example, that “free” phone you get for signing up for your mobile data service subscription plan? It requires a long-term 2-year contract. Worse, this is usually only offered when you choose a more expensive plan.

What about the buy-one-get-one-free deal? You have to buy the first one at full price. It is a greater financial loss if you wouldn’t buy the product without the deal. Even when you want to watch a free YouTube video online, you have to watch an advertisement for at least 5 seconds before you can skip it.

It’s not that you shouldn’t take advantage of offers. It is worthwhile if it was really something you needed anyway, like a mobile plan that suits your needs even if it’s more expensive. But you should understand what you’re really paying – money or time?

Read Also: 5 Money Fears That Can Be Conquered Easily

Top Image Credit: DollarsAndSense.sg

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