Although they don’t have many liabilities to pay, many singles find themselves living paycheck to paycheck. It is nothing but the result of a reckless attitude towards the future and therefore a serious lack of planning and budgeting. Prioritizing maintaining their status in society over securing their future results in consequences for them later on. Here are five ways to escape this mindset:
Increase the proportion of savings
For a financially secure future, experts say you need to save at least 20% of your monthly income. When you’re single, you don’t have too much debt on your shoulders. You don’t have to pay EMI for a house, a car, or your children’s education, so you can increase this percentage to a large extent. Living with parents or sharing an apartment with roommates is another way to reduce expenses and increase the proportion of savings.
Create an emergency fund
Blinded by the invincibility of youth, singles tend to take ‘YOLO’ far too seriously. They spend all their money on clothes, shoes, cars and gadgets to impress others, instead of saving for a rainy day. Don’t be one of those people and please build an emergency fund. It will relieve you of a lot of stress and anxiety in the future.
Avoid lifestyle inflation
Getting a raise at work means nothing if you keep improving your lifestyle at the same time. Financial freedom requires breaking away from the need to signal one’s status and cap one’s standard of living. In short, increase your income to the maximum but always live below your means!
Buy assets, not liabilities
Borrowing money is not a bad thing as long as you put the borrowed money to good use. The smartest people borrow money to invest in assets like stocks, mutual funds, and bonds, while others do it to buy liabilities like clothes, cars, shoes, and houses. As a single, be careful not to fall into the other category.
Practice delayed gratification
We live in a time of plenty, where people feel the need to always be stimulated – whether in the form of entertainment content, fast food or shopping. So much so that a moment, in itself, seems flat. If you want to be part of the 1% that stands out, practice delayed gratification and only spend on what you need.
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