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Despite not having many liabilities to pay off, a lot of bachelors find themselves living paycheque to paycheque. This is nothing but the result of a reckless attitude towards the future and hence, a serious lack of planning and budgeting. Prioritizing the maintenance of their status in society over securing their future makes them suffer consequences later. Here are five ways you can escape this mindset:
Increase The Proportion Of Savings
For a financially secure future, experts say that one should save at least 20% of their monthly income. When you’re a bachelor, you do not have too many liabilities on your shoulders. You don’t have to pay EMIs for a house, car or your children’s education, so you can increase this percentage to a great extent. Living with your parents or sharing a flat with roommates is another way to cut down expenses and expand the proportion of your savings.
Build An Emergency Fund
Blinded by the invincibility of youth, bachelors 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 these people, and please build yourself 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 upgrading your lifestyle simultaneously. Financial freedom requires breaking away from the need to signal status, and putting a cap on your standard of living. In short, increase your income as much as you can but always live below your means!
Buy Assets, Not Liabilities
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Borrowing money is not a bad thing as long as you put the borrowed money to good use. The smart borrow money to invest in assets like equities, mutual funds and bonds, while others do it to buy liabilities like clothes, cars, shoes and houses. As a bachelor, be careful to not trip over to the other category.
Practise Delayed Gratification
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We live in times of abundance, where people feel the need to always be stimulated - whether in the form of watching entertainment content, binging on fast food or going shopping. So much so that a moment, in itself, seems flat. If you want to be among the 1% who stand out, practise delayed gratification and spend only on your needs.
Also read: 5 Books That Can Help Women Be More Financially Empowered
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