Having a financial plan to manage your money is good if you’re looking for financial stability but as it is with most activities, it may be taken for granted. There’s the temptation to consider everything okay as long as you’re not in debt, able to regularly save part of your income and have some significant sum of money stashed in a savings account.
The above is a scenario we will refer to as financial stability. But being just financially stable isn’t enough. What will you do if an emergency arises and you need a huge sum of money to settle it? And what about challenges such as being laid off at work and having your own business going downhill?
It’s in view of such situations that you need to be more than financially stable. You need to be financially prosperous—able to survive financial emergencies, business downturns, and job losses.
Become financially prosperous by taking your financial plan to the next level. Here’s how to do it.
To be on top of your finances, you need to regularly update your financial plan. If you have a pay rise, don’t forget to factor it into your monthly revenue calculations as opposed to your monthly expenses. Not factoring in new revenue figures in your budget calculations will lead you to spending more than you need to, once a false sense of security is developed over the increase in pay.
Likewise, you should also make adjustments in case of decrease in expenses or a downward change in your revenue figure, either through you changing jobs or going through the unfortunate incident of a pay cut.
A decent job with a decent pay may ensure some sort of financial stability in your life, but you need to become financially prosperous. And you can do that by creating multiple income sources for yourself. Is there a part time job you can handle besides your day job? Grab it. Do you have a skill or a talent which you can use to earn some extra funds for yourself? Utilize it.
Multiple income sources equals you having more money to save, becoming less likely to fall into debts and being able to handle emergency expenses when they arise.
To become financially prosperous, you should also consider including investments in your financial plan. There’s no point in letting your money lie idle in a bank account, earning some paltry interest. Get financial advice or do a little research into financial stocks, government bonds and mutual funds you can invest in to earn more than savings-account -interests on your money.
Such low risk investment vehicles will add to your income sources in the long run.
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