5 Important Questions to Ask to Get Ahead in Your Finances
Have you started thinking about your financial future? It’s never too soon to start thinking about it, or too late to start saving. As we move through our #adulting years, it’s easy to live in the moment and spend our hard-earned pay cheques on brunch and fancy cocktails. But if you want to get ahead in your finances and cultivate a flourishing financial future, you need to start taking action now.
If you’re not sure where to begin, here are 5 important questions to ask to get ahead in your finances.
What’s My Spending Plan and Budget?
Do you have a budget set out for yourself? If not, it’s time to get one started. If you’re spending more than you earn, you’ll likely never be able to get ahead. One of the easiest ways to create a budget is to track your spending and expenses for a few months to see where your money is going. Then figure out how much you need to spend on living and necessities, car payments, debt pay-off, and how much you can save.
When Should I Start Investing?
Investing is a hot topic and not many people know when or where to start investing. They know it’s important to invest, but are lost when it comes to making a move. One of the most beneficial places you can start investing is a retirement account. This way, you secure your financial future, while saving money on taxes. It’s a win-win!
How Much Should I Be Saving Each Month?
With increasing living expenses, and the urge to reward yourself with dinners out with friends and trips abroad, saving can sometimes come in last place. But if you want to get ahead in your finances and feel secure in the future, you need to start saving ASAP. Even if the portion you save out of each pay cheque starts small, it’s important to build the habit so you can gradually begin to save more. It’s ideal to save 25% of your gross pay, but as long as you start somewhere, you’re getting ahead.
Can I Be Earning More Money?
Are you doing everything you can to hit your maximum earning potential? Ask yourself what you can do to earn more. This could mean asking for a raise at your job or even switching careers if there’s something else you’d rather do that pays more. Also think about any side hustles you could take on. There are plenty of ways to make a side income these days, from social media management to photography to blogging to Uber. Find one (or a few) side hustles you love and stick to it!
How Much Can I Afford to Spend on Housing?
Whether you rent or own your apartment/home, it’s important to know how much house you can afford. It probably accounts for the biggest chunk of your budget, but not everyone is paying what they can afford. If you want to live in a hot spot in the city, home rent and ownership doesn’t come cheap. If you’re paying more than you can afford on housing, ask yourself if you’re willing to sacrifice location to help you save more money.
What other questions should you ask to get ahead in your finances? Let us know in the comments.
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Kate is a Toronto-based freelance writer and founder of lifestyle blog, www.layeredindulgence.com. When her head isn’t buried in her laptop, you can find her taking a hot yoga class, curled up with a good book, or sipping a chai latte at one of Toronto’s various cafés. Follow her adventures @katebialowas.