Create a Surplus for Your Financial Future

by Ryan Yates

surplusCreate Surpluses for your Financial Future

At the end of every month you hope to have money in the bank, a surplus that you can use to plan your financial future. Some months might be more than others. But as long as there is a surplus, your savings will build; and compound interest will ensure that it grows quicker than you think.

Your surplus can come from earning a little extra each montht, but also by finding places in your budget where you can save money.

A Habit of Saving

Saving is a habit that, ideally, children should learn from their parents and pass on to their own children. Those who learn the value of money when they are very young are more likely to successfully handle their finances once they have grown.  Some things come along to upset plans and certainly the recession was one such thing. However, with the US Economy on the move, there is no reason why people in full time employment should not be able plan their financial future – as long as they spend responsibly.

Simple Savings

So, where are the obvious savings in your monthly expenditures? Perhaps you should look at your phone bill? Are you spending more than your friends for no apparent reason? There are plenty of comparison websites that help you get the best deals on just about everything in your home.  And while we’re talking about your home, some of those repairs you’ve been putting off might just help save you money in the long run.

You should ensure that your home is well maintained even if it costs money. Even a water leak can be a big-time money waster!

High Interest Debt

There are some other areas where you might be able to save significant amounts of money – credit cards and high-interest loans. The figures for credit card debt in the USA are quite disturbing. It shows that cards are not only convenient, they are also apparently helping people to buy things they may not really be able to afford. Balances incur a high rate of interest, which is definitely a waste of money. Those of you who learned the value of money as a child are likely to discipline yourselves to spend responsibly and not build up credit card balances. Figures suggest you may be in the minority.

There are potentially serious consequences for those of you that believe that the Social Security System will provide for a comfortable retirement. Estimates suggest that with fewer people paying tax into the System and people living longer, within two decades there will only be sufficient funds available to pay around 75% of benefits at the current level. If you are going to live a significant number of years after retiring, you should start to make your own provisions as a matter of urgency. There are some of the savings described above that can help, but if you are wasting money on high interest debt, you should get rid of it as soon as possible.

Dump those credit cards and save up for stuff that you want to buy.  Whatever your plan of attack, don’t spend money that you don’t have.

Personal Loans

One way to do that if you are in full time employment with a regular pay check each month is to pay off that high interest debt with a personal loan with a far lower rate. There are good online lenders happy to oblige.

The basis of the approval decisions is affordability, not the credit score that many of the traditional lenders seem to rely on. If a loan application is realistic and it appears that the person who is applying can afford the monthly instalment repayments on time for the full term of the such loan, direct lenders are very likely to agree and transfer the money to you within a single business day.

In this way you can further reduce your liabilities; together with the savings potential of the items above you may suddenly have a surplus for your use. Save it and put it towards your financial future.

You may think you can get growth from the real estate market and fund your retirement by downsizing at retirement and resolve to do so. It can be difficult sometimes to leave a familiar neighbourhood so you must be aware of how you might feel having to do that. If you follow the S&P 500 you should also get growth. Where to invest and save is for another day; just make sure you do it!

{ 1 comment }

MrMoneyHacker October 5, 2015 at

I think you can also explain what a roth ira is and how to open a vanguard account. But overall it was a well covered topic.

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