A balanced lifestyle is essential for a happy and fulfilled life. It’s why people often refer to the saying “work smarter, not harder” when discussing productivity and maintaining a healthy work-life balance. The popular saying doesn’t just apply to your career, though—it applies to finances, too.
Although you do need to put in some work in order to get rewarded financially, the fact of the matter is that you don’t need to work around the clock in order to grow your money to its fullest potential. By taking advantage of the opportunities that are available, you can increase your finances by letting the money do the hard work. Continue reading to discover the five ways that you can be more financially productive now.
1. Open a bank account that offers interest
Building an emergency fund is essential, so if you’re going to have money sitting in savings, you should definitely try to get a bank account with interest. It’s a great way for your account to grow without lifting a finger by earning interest on money you have in savings. Of course, the amount you earn in interest depends on how much you have saved, and though interest rates usually aren’t very high, the more money you have, the more interest you’ll receive. This is a great incentive to not only save money but also to keep adding to your emergency funds.
You have two options: a high-yield saving account or a money markets account. These are both good options for your emergency fund. Almost all high-yield savings accounts are found online, so you’d have to use an online bank for this. Bask Bank currently seems to be the most appealing option with 0.80% annual percentage yield (Annual Percentage Yoeld), no minimum balance requirements to begin earning interest, and no monthly fees. Barclays, CIT Bank and LendingClub are also options. However, rates, requirements for earning interest, perks and fees can vary from one bank bank to the next. Money market accounts are similar in structure to high-yield savings, but they can be opened at any bank, online or local. They usually require higher deposits and have fewer withdrawals and transfers. No matter what account you choose, it is important to do your research and thoroughly review everything before opening an account. You want to make sure you’re going with the best option for you and your needs.
2. Invest
Much like the interest you earn off of a savings account, you will earn money off of investments—but at a larger rate. Investment portfolios are designed for growth. The sooner you invest, the longer your money will grow. This is a great way of investing in yourself, saving for the future and fighting inflation. Having investments helps you stay ahead of inflation because you’ll earn more and the value of your money will increase over time.
The good news is that you don’t need a lot of money to start investing. Experts recommend starting small and slowly building up your investment portfolio. You could invest the money that you have left over after paying your living expenses or contributing to an emergency account. It doesn’t matter how much you start with; all that matters is that you start. Invest in what you believe and let the money take care of the rest.
Being a first-time investor is not easy. There are many websites that offer free help to get you started. Investing.com offers email subscriptions for free so you can receive economic and stock updates daily or weekly to your inbox. Public Offers is an app you can use that allows you to build all your portfolios and learn about investing. Ellevest is an investment tool specifically geared toward women that uses stocks, bonds, and alternative funds to help you build a diverse investment portfolio designed with important realities for women—such as pay gaps, career breaks, and longer average lifespans—in mind from the start.
3. Keep track of your income and expenses
Let’s be honest for a minute: It’s easy to lose track of money. Because we live in a fast-paced society, it’s easy to lose track of money. Tracking your income and expenses—regardless of your financial situation and income—is key to knowing where your money goes, and knowing this will help you become more financially productive. You can track everything using spreadsheets or templates via platforms like Google Docs, budgeting apps, or manually. This is not a way to stress out or worry about money. Rather, it is to make you more mindful of it and what you’re spending, which will ultimately help you become more financially productive and successful.
4. Learn more about capital assets, and invest in them
Contrary to popular belief, not all debt is bad debt, and investing in capital assets—such as stocks, baskets of assets that diversify investment portfolios like mutual funds or exchange-traded funds (ETFs), real estate, or collectible artwork—can be a great way to generate income years from now. A capital asset is an investment that’s expected to generate value over a long period of time. Knowing what you’re spending your money on and the estimated return of income (ROI) can help you make better financial decisions.
This is evident when you are deciding whether to buy a house or a car. Sure, a car might be more flashy and thrilling, but it will only depreciate in value over time—you likely won’t make back the money you spent on it. A home is much more likely to be a long-term investment. You have the ability to rent it out for short-term income, and eventually, if you decide to sell, you’ll probably be able to make back what you bought the house for and then some. Real estate tends to appreciate in value over time. Any additional work done to a property or home will only increase its value.
5. Spend smart
Your future self will be grateful for being strategic about how you spend your money. In addition to building your savings, investing, and knowing where your money goes, it’s also important to practice smart spending. You don’t have to count every penny you spend, but being smart with your money is only going to enhance your financial productivity.
Take a look at all aspects of your life, including school, career, housing, living expenses, amenities, and other areas. Is there anything you can cut back on or consolidate in order to save more? For example, if you’re fresh out of college and trying to get on your feet in your career while paying off student loans and are choosing to pay for an apartment when you have the option to live at home, you might want to consider letting go of one expense and moving back home for a bit. Everyone’s circumstances are different, but you might be surprised at the ways you could be missing out on saving money. Even something as simple and straightforward as cancelling a gym membership or cutting back on streaming can make a big difference. Instead, you can use YouTube’s free workouts to train at home.
Smart spending is a way to save more for the future, make better strategic investments, and live a more productive financial life. Financial health is vital to a healthy financial life.
Source: The Every Girl
