How to Lay a Solid Financial Foundation?

You must be aware of the fact that major parts of the world are facing economic crisis and because of economic crisis, millions of families are going through financial hardships.

However, economic crisis are not in the hands of any individual or family, but if those families who are facing financial hardships at the moment had laid down solid financial foundation in their past, won’t be going through such financial hardships for sure.

So, I guess that now you must be aware of one factor that is causing problem for majority of the families that if they had laid down a solid financial foundation in their past then things might have been different for them at the moment.

So, in this piece of writing, I have decided to share some information which can help you out in laying a solid financial foundation, so that, you would not count yourself among those who would be having financial concerns in the near future.

In order lay a solid financial foundation, you must learn to remain within your limits first. By limits, I mean to say your financial limits. Spend only on things which are necessities not the ones which are luxuries. The best way of doing so is by preparing a monthly budget and avoid unnecessary use of your credit card.

Allocate a certain amount to your monthly expenses of grocery, utility, rent and etc and after allocating a budget, if there is something left within your hands, then you must deposit the remaining amount to the savings account.

This way, you would not only save something but you would also earn handsome amount of interest on monthly basis on the deposited money as well. Follow this act as long as you possibly can, deposit an amount every month in savings account and earn compound interest on every month as well.

For laying a solid financial foundation, you must also try to increases the resources of your income as well. If you are working 9-5 and you have spare time after 5 then you must look to do some part time job to increases your monthly income. You can consider doing some part time job or you can also do some home based business as well.

Avoid getting trapped in the ditch of credit card debts and I can assure you that you would be all set to lay a solid financial foundation of yourself and if your foundation would be strong, everything thing standing over the foundation would be strong as well.

  • I think it is a good advice to always save one 10th of the income and put it away.

  • Rod

    I would advise against keeping too much money in a bank account. Inflation outstrips the interest rate on a bank account, hence, money in a bank account is decreasing in value (losing money) everyday. It would be good to keep say 1 year worth of your monthly income to address any emergency requirement. Any funds in excess of that should be for investment purposes, not for savings only. Just my 2 cents worth.