April is Financial Literacy Month, a great time to start on your path to wealth.
Dealing with money and investments may seem challenging at first, but laying the foundation can be done in three simple steps:
- Spend less than you earn
- Pay down your debt
- Set aside savings
Yet as we all know, those three steps can take a lifetime to master.
Spend Less
To get started, take this financial assessment quiz to find out where you currently stand.
Then, start a budget. Begin by saving all your receipts for a month — including online and credit card purchases.
Even if you are living paycheck to paycheck, you can usually find a place where you’re spending more than you would like. When you start paying attention to where your money is going, it’s easier to get spending under control.
If you have trimmed where you can and money is still tight, think about your skills: what can you do to earn extra money? Even if all you can offer is basic housework, start a side business in your off-hours. Summer lawn-mowing jobs can actually be quite lucrative.
Pay Down Debt
Now that you are spending less than you earn, it should be easier to pay down your debt. There are lots of resources on how best to do this, but the important part is that you do. Use whatever method works. Here’s a free basic plan outlining some strategies.
Build Savings
As you pay down debt, you may find you have extra money. Rather than spend it, now you can put that money toward savings, which will protect you for the future.
Experts recommend having:
- An emergency fund with enough money to pay living expenses for at least three months.
- General savings for vacations, large purchases, house down payments, etc…
- Retirement savings
- Investments
It is recommended that your emergency fund — which you may need to spend suddenly — be easily accessible cash. It is likely this will amount to several thousand dollars, so keeping it in a safe place is imperative.
Your other savings can be held in precious metals. You can even start a Precious Metals IRA, and use gold and silver to fund your retirement.
Your investments can include a range of products, from volatile stocks to long-term platinum, palladium, silver, gold and diamonds. Some people choose to invest in real estate or even collectibles.
Make the right choice for you — but be sure to diversify.
Are you financially literate? What else would you like to learn?
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