Most of us are guilty of robbing ourselves of our future income by failing to pay ourselves first. We think buying ourselves a shiny new gadget is a type of pay-yourself-first expense. But it is quite the opposite.
Paying yourself means setting aside enough money that will work harder for you through investments and/or businesses.
So, how can you and I stop robbing ourselves of our future income? Here are seven tips:
1. Change how you view money.
Money isn't just a piece of paper or a digital number on our bank apps that we can use to purchase products and services. We should also realize that we can multiply money and let it work for us by putting it in an investment instrument or using it as a capital for our own businesses.
When we put our money to work today, it will give us income for the years to come.
2. Make more money while you can.
While we are young, we have the advantage of having stronger minds and bodies that will enable us to make more money by taking more work or increasing our knowledge and skills so we can get better opportunities for ourselves.
As much as possible, we should take advantage of our age, good health, and tons of time in our hands so we can make more money for ourselves and our loved ones.
3. Control your expenditures.
We rob ourselves of our future income by spending our hard-earned money carelessly. By controlling our expenditures using a financial tool called "budget", we will be able to dictate how our money should be spent. Budgeting isn't all about depriving yourself. Instead, it is here for us to take control of our money so we can finance all of the important things that we need and want in life.
4. Avoid bad debt.
Just like any bad and unnecessary expenses, bad debt is something you should also avoid. Before you take a new loan, ask yourself if you truly need it. Do you really need to buy a new gadget using a loan? Do you really need to take a personal loan just so you can travel extravagantly?
If you will take a loan, it should better be for your new business or investment opportunity that could bring you more money in the end.
5. Protect yourself and your loved ones.
Protecting yourself and your loved ones financially is an important part of building your future income. This is because emergency funds and insurance products are designed and created so you can be prepared for life's risks—allowing you to save your hard-earned money for investments instead of financing emergency expenses. When you build your emergency fund and purchase sufficient life, accident, health, and other types of insurance plans, your future is guaranteed financially.
6. Build your savings.
The purpose of savings isn't to finance your emergency expenses or for you to have extra cash in case your favorite mall goes on a 3-day sale. Savings should be set aside and used for investments and other opportunities that will grow your hard-earned money. Make sure that you will include savings as an integral part of your budget. If you fail to do so, then your future could be difficult financially.
7. Grow your savings.
Once you have an adequate amount of savings and knowledge about the different investment vehicles available for you, you should start multiplying your hard-earned money as quickly as possible. Time and financial literacy are two vital components of investing. Financial literacy will enable you to make educated decisions in your investments and time will enable it to grow over time.
Bonus: Make me your Financial Adviser.
As a millennial financial consultant, I understand your situation and your needs financially. My advice and services are free so don't hesitate to work with me so you can manage your finances well.
Building your future income is a step-by-step process. First, you need to work on your money mindset. You need to view money as a tool to make more money. Then, you need to build multiple streams of income and make money while you are still young and healthy. You also need to use a budget as a tool so you can take control of your finances. Avoid bad debt and unnecessary expenses so you won't spend your hard-earned money on things that have no future value.
Once you are done with all of these things, you'll notice that you are slowly but surely building the financial discipline that you'll need to protect yourself financially by building your own emergency fund and purchasing sufficient insurance plans for your life, health, and properties. This is also the stage where you will be able to build your savings easily because of your new-found financial discipline. And ultimately, once you are done doing all of these things I mentioned, you are now ready to make your money grow through investments and businesses.
Remember, your future income depends on what you do with your hard-earned money today.