Thursday, 20 December 2018

20TH: TIPS TO IMPROVE YOUR FINANCIAL GAME THIS 2019


London is such a beautiful, buzzing city. Like anywhere else, one needs money to comfortably enjoy this place. Always listed as one of the most expensive cities in the world, rent is the highest cost factor in my experience. London is divided between Zones 1 to 6. Zone 1 is central London, it's closer to the business district and tourist attractions so rental costs here is more expensive compared to higher zones. Not to be mistaken that Zone 6 is not good because opulent areas like Richmond, Hampton Court and Kingston are within Zones 5/6. I was talking to a friend the past week and she said a one-bedroom flat in Zone 1 has the same price as a five-bedroom flat plus garage, conservatory and garden in midlands England. Crazy, right? Personally, I wouldn't have chosen to live in central London if it doesn't make sense financially. I did the maths and this is the best option, for now.

I'm sure all of us would welcome additional money in the bank but how come money is so elusive? Easy to spend but dang hard to earn. So, what's the plan?

Have a concrete goal. Be specific, like I want to save 40% of my monthly salary. It helps if you have a separate pot money for your everyday expenses. I personally use Monzo for this because it categorise my expenses automatically. Give yourself a budget for a month and stick to it. I usually skimp on the first two weeks (read: holding off any expenses that can wait like eating out etc.) and splurge on the last two weeks knowing that I'm right on track budget-wise.

Don't let your money sit idly. It's very tempting to accumulate your savings in the bank and watch your money grow. Only problem is savings interest income is so low and negligible. Look for investment options and schedule a meeting with the entity that you want to invest on. TIP: If you are in the United Kingdom, make sure it is regulated. One of the questions to ask {albeit cold} is: What will happen to my money if your company go bust? Research intensely before parting with your money. If you feel lazy, just remember: how many hours did it take you to earn that money, only to give away when the next dashing sales rep ask you to sign the dotted lines. You know what I'm saying?

Compute your hourly rate. This is a very powerful perspective. For me, it's a good litmus test on whether I should go to that salon that charges me this amount or whether I should splurge to this item, and so on. It works both ways. Say, if I get a coffee or eat in my favourite restaurant every once so often, I am not spending mindlessly because I have this magic figure in check. It also gives me an added boost of appreciation knowing that my job enables me to enjoy nice things in life.

Keep track of your investment portfolio. It doesn't matter if you only have one or just a handful, keep track of your savings and investments. It can be as simple as an excel sheet or Google Keep with details like account number, projected income yield and so on. It's a good way to check where your money went after you doing your 9 am to 5 pm this year.

Buy in cash (pay upfront). This is true especially for phone bundles. If you sit down and compute pound for pound, it's as clear as daylight. I don't have anything against it but if you're my very close friend, I will encourage you to not fall into this trap. Imagine, you have to pay a monthly fee for 24 months (that's 2 years!) that's way higher than the market price. If you buy the same handset and pay the phone company just for the line fee alone, the delta is huge. PS: Don't forget to sell your old handsets too if you don't need more than one phone.

Own less but own quality items. This is an echo of my post yesterday, THE TEN THINGS I NO LONGER OWN. It is life changing in its truest sense! Again, when I did the maths, it makes sense financially to buy one item that you will use for 100 times than 5 items that you'll use just once or twice.

Just. get. started. New year is the best time to start something. A habit, a project, a new outlook in life. Money will always be one of the biggest factors in our lives (unless we are a millionaire's sons or daughters). Let this be our motivation to do good, try again and without overthinking or procrastinating (uh-hmm), just bloody get started! -CMK
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