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5 Realistic Money Managing Strategies to Be Financially Free (With Investment Tools)

Learn the best ways of saving money and investing it the right way

Investing in real estate: money house

When you type in "how to save money," Google greets you with approximately 60,80,00,000 results. Between How to Invest Like Warren Buffet and How Kim Kardashian Built a Multi-Million Empire and You Can Too; it can get overwhelming and before you know it, you are buying a Nike sneaker through a retargeted ad that was following you everywhere.

That is why we have compiled a list of 5 realistic and easy-to-follow money managing strategies to help you be financially free.

At a glance:

1. Spend Less Than You Earn

2. Keep Aside Your Emergency Pot

3. Make Your Money Work for You

4. Deal With Your Spouse's Debts

5. Plan Ahead for Your Retirement

Each strategy comes with investment tools – whether it's an app to invest your penny change or buying real estate for $500 – so you follow through on these strategies. Let's get started.

Spend Less Than You Earn

The secret to creating true wealth is ridiculously simple – spend within your means. Frugality can go a long way in helping you to spend less, commit to savings, and plan a budget.

Living within your means doesn't have to be a deprivation exercise. In fact, once you start planning, budgeting can be fun. Start with a simple spreadsheet to track your earnings and expenditure. Tracking where your money goes can not only help you spend your money smartly but also cut down on unnecessary expenses like coffee.

Graham Stephens, a 29-year-old YouTube millionaire, refuses to spend money on coffee. His reason: "I think the markup of coffee at Starbucks and Coffee Bean and a lot of those places out there is absolutely ridiculous, so I just make it at home for 20 cents."

Keep Aside Your Emergency Pot

An emergency fund is essentially money saved and kept aside in a bank account to cover large, expected expenses including unforeseen medical bills, car fixes, and even, unemployment. The common advice is to keep aside 6 month's salary in high-yielding savings account for the rainy day.

Building an emergency fund is the most recommended financial planning advice, but also the most ignored. Often we are not able to prioritize or manage our expenses to add to that emergency pot.

If you are having a difficult time to save despite budgeting, here's what we recommend:

  • Moonlighting or taking up a part-time job.
  • Minimal living – Sell the stuff you don't need.
  • Keep your pennies and spare change in a savings jar.
  • Couponing – Kristen Bell may be worth millions, but she doesn't shy away from couponing to knock some cents off her grocery. If she can do it, so can you!

Make Your Money Work for You

Investing is one of the most basic yet powerful tools you can use to make your money grow. Though most people limit their investing to 70:30 stocks and bonds portfolio, after the 2020 stock market crash, it has become increasingly clear that diversifying your portfolio can hedge your bets during a recession.

Real estate is often touted as a recession-proof investment to help you diversify and protect your portfolio. Though investing in real estate requires high capital and some serious property management skills, which leaves out 99% of investors from taking advantage of billionaires' preferred asset class.

However, DiversyFund is one such company that has democratized investing in real estate. It is a long-term alternative investment platform that helps you avoid the stock market's roller-coaster ride and grow value with real estate. They allow non-accredited investors to buy shares of rental properties for $500 (less than the cost of an iPhone).

You can sign up here to learn more about investing with DiversyFund.

Another low-risk, portfolio diversifying investment tool from the top of our editorial list is Acorns. With Acorns, you can invest your spare change automatically on your daily transactions and grow your money with almost no efforts.

This is how it works:

Start investing your penny change today at $1/month.

Deal With Your Spouse's Debts

Debt is one of the most common conditions in America. In fact, consumer credit card debt in the US had hit the record-breaking $1.08 trillion mark in 2019.

So, it is not a surprise that most of us enter in a relationship carrying our or that of our spouse's debt on our shoulders. While talking about our debts at times can be difficult, it is a conversation worth having.

J. L. Collins, financial advisor and the author of The Simple Path to Wealth writes, "Avoid debt. Nothing is worth paying interest to own. Avoid fiscally irresponsible people and certainly don't marry one."

Though dealing with your or your partner's debt doesn't have to be an awkward affair. Having a clear payback plan, renegotiating and refinancing your debt, and maintaining your credit score are some of the ways in which you can take the burden of debt from your relationship.

Unfortunately, ignoring and hoping for your debt to go away doesn't work. So, get your partner and yourself on a call with a debt relief expert before you get hitched.

Here are the 3 Best Relief Programs of 2020 to help you get started.

Plan Ahead for Your Retirement

Couple sitting on a bench retirement

Managing and investing money can boost your financial investment strategy tenfold. But if you continue to save and invest with no end goal in sight, you are planning to fail.

Developing a solid retirement strategy is as simple as knowing what your saving options are and how much you need to save to meet your retirement goals. Though if you don't know where to start, fiduciary financial advisors can help you with your investment goals and retirement planning.

Financial advisors are not only for the uber-rich. One Fintech company breaking this misconception is SmartAsset. It is a completely free online platform that helps over 65 million people every month make smart financial decisions.

Here is how its SmartAdvisor platform, a powerful financial planning tool, works:

  1. You fill in a short online form detailing your financial goals and plans.
  2. The concierge team reviews your responses and verifies your contact information.
  3. Then, they match you with up to 3 fiduciary financial advisors near you.

Apart from that, it is also a good idea to contribute a minimum amount to your company-sponsored 401(k) plan to get the company match. When a 401(k) or similar savings plan isn't an option, you will want to look at a traditional or Roth IRA.

Managing your money and learning to spend it wisely can not only make you financially independent but also teach you some important life lessons.

Find a financial advisor near you and start planning.