The Perfect Recipe to a Healthy Financial Life
My family and close friends believe I am never worried about finances. And although they haven’t vocalized it, I think that they think I either make more money than the Government can print, or am completely financially irresponsible or that I am God.
Neither applies to me, and there is no SECRET either in my opinion to how to live a healthy financial life. Now I am not a personal finance Guru, but I do follow a fair share and have yet to come across a secret recipe.
Everyone seems to preach conscious and responsible financial behavior. I don’t think it gets simpler than that. And without getting into the fine details and turning this into a 9 page post, I have summarized the steps that I feel one must take to rid of financial stress.
What: EDUCATE YOURSELF ON BASIC FINANCES (Your FICO score, saving, investing, income taxes)
How: Pick up a book on personal finances. Subscribe to one of many blogs and podcasts series. Watch the candy they show on CNBC. Make it an ongoing quest to learn about a new topic each time.
What: PREPARE AND STICK TO A BUDGET (Be a smart & responsible consumer)
How: Income minus expenses = savings. Put it on paper/computer, revisit often and do not abuse it.
What: GET OUT OF DEBT (Learn what is good debt and what is bad and avoid BAD)
How: Depending on the type of debt you are in, pick up a book on the topic.
What: BUILD A RAINY DAY FUND (6-8 months recommended. This money can be in a savings, CD or money market account)
How: Put the left overs from the income minus expense equation aside until you hit this
What: INVEST IN YOUR FUTURE (Retirement planning)
How: Put away 10% or more of each pay/earnings in a retirement vehicle. Set up auto deductions if possible.
What: PROACTIVELY ENGAGE IN TAX PLANNING (Reduce your effective tax rate)
How: Visit the IRS.GOV website or one of many tax tips blogs and learn everything you can about maximizing tax benefits for individuals in your situation.
What: PROTECT YOUR WEALTH AND ASSETS
How: This is a relatively advance area of personal finance. When you get there, pick up some books and read up, then go get yourself a good attorney.
What: START A SIDE BUSINESS AND DIVERSIFY YOUR INCOME STREAMS
How: Read every single post on my blog
Do you see an overarching theme? It’s education, and not one that you find in the classroom either. Take the time to educate yourself. Learn the basics and then go down this list.
It is not a comprehensive list by any means and I might be missing things here and there. Generally however, these steps should take you closer to living a stress free life with financial peace of mind.
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15 Responses to “The Perfect Recipe to a Healthy Financial Life”
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Some awesome tips here, Sunil. If only more people followed them, we wouldn’t be complaining about the rotten economy as much. LOL
Ana
PS Looks like your CommentLuv needs an update.
It’s more than just CommetLuv apparently that needs some help – I replied to your comment and my blog decided with its own mind that it wanted to post it way on the bottom (see below). I think it intends to show you that I ignored you 🙂
The day you stop learning, you are probably dead! We should be exercising my brains reading and learning new things all the time. Otherwise, we will stagnate.
“The day you stop learning, you are probably dead!” – excellent. I can’t stand going a day w/o learning at least one thing.
Hi again Sunil,
Nice post and seems like you got all the major bases covered.
One of the most important things in your list, in my opinion, is to build a rainy day fund. All of us need that buffer to help us through tough times and yet so few people focus on creating this security.
Sunny welcome first of all. I like your website concept – will have to keep up with it to see how it develops. I love the tagline “serving the world’s…..”. Hope to see you more and please keep me updated with going ons at websitemarketinghq.
Ana –
1) Welcome to the blog – I am indeed honored
2) You are absolutely correct. Not enough disciplined individuals. Even fewer “go getters”. While I can only pray for everyone’s well being, I can’t help but subtly smile each time I hear someone say something negative about the economy. Everyone is in full control of their own destiny (IMHO)
3) I need to revisit the back-end and fix all the kinks. Oh the joy of not being too technical. I have a growing list of to do’s for the blog, and I plan on giving it an overall face lift soon to catch up with cool designs like yours.
Hi Sunil,
I completely agree with your recipe especially about education. One blogger pointed out that one of the main reasons of financial failure is ignorance. Most of us blame the government and everyone and everything except ourselves.
One thing that’s new to me is tax planning. I haven’t been proactively engaging in it and I think it’s time that I did.
Great tips, thanks for sharing and have a nice day!
Theresa – welcome to the blog. You are right about your statement. Education empowers us to do anything we set our mind to. Regarding tax planning, it is our single biggest expense, without most people truly understanding how big of a component it is of our personal income statements.
You might enjoy this piece: http://easyextramoneyonline.com/blog/2010/08/effective-tax-rate/
Thanks for the comments on my web marketing site, Sunil – it’s one of my recent projects that I’m getting off the ground. I also have a few more very exciting sites in the pipeline. The work required to get them going is pretty significant but I’m marching on.
Have you got any other sites ready to go? Or are you just concentrating on this blog at the moment?
Congratulations Sunny – would love to hear more about your ventures and what your focus is.
I have a dozen plus niche websites which I am further monetizing, a lot of which I have disclosed here and in guest posts on various blogs. I have sold a couple of those in the past, as well as an ecommerce website for six figures, my biggest sale to date. You can read more about it in the archives of the blog.
Great to hear Sunil and yes, I have read about the six figure site – great stuff.
I’ve actually sent you an email related to new ventures – would be great to hear back from you when you get a chance 🙂
Not to mention taking consistent and persistent action based on the financial goals and plans, that’s key #2.
Key #1??
Is to find out the real reason why you want to get rich or financially free. Once you find out the real reason, the how and what will fall into place.
Great recipe! This recipe immediately made me think of a recipe that my grandmother cooked. Thank you for sharing, and for reminding me of all the good memories. Regards, Roger
interesting parallel. hope she wasn’t cooking books 🙂