Life has become quite crazy these past few years. Sometimes, things come up that we simply cannot predict, and they leave us in a difficult state. Every single emergency that hits us impacts our financial security.
If we take the right actions, we can oftentimes create some room to breathe financially. Many financial organizations have their own recommendations for how to improve your financial security.
So ahead of the Jewish New Year, here are six tips on how to increase your financial security, according to recommendations by Israeli investment fund Meitav Dash Investments Ltd and investopedia.com.
Start as soon as possible
Saving is key from as early as possible - the early bird does, in fact, get the worm. The longer you save, the more time you have to save. It's as simple as that.
Diversify your portfolio and increase sources of income
The most obvious way to increase your monthly income, first and foremost, is by asking for a raise at your place of employment. It's definitely not the easiest thing to do, but if you have significant value in the workplace, there is no reason that you shouldn't be deserving of a balanced step up in your income.
"Putting all your savings into one form of investment increases the risk of losing all your investments, and it may limit your return on investment (ROI)."investopedia.com
According to Meitav, before going into your meeting with your boss, you should research and understand the salaries that are currently running in your respective field. Make a list of your personal achievements and successes to present as evidence for your deserving an increased wage.
By the way, an improved income doesn't just mean a raise. You can ask for a training fund to be opened for you, for example.
But your main salary isn't your only source of income; your investments are, too. According to investopedia.com, the old adage saying not to put all your eggs in one basket applies in this situation more than most.
"Putting all your savings into one form of investment increases the risk of losing all your investments, and it may limit your return on investment (ROI)," the site states.
Instead, you must consider your age, risk tolerance and the like before making your investments, and spread them as thin as you can allow yourself. Your risk tolerance decreases the older you get, since the number of years when you can recuperate any losses goes down.
Approach your savings account as though it's a bill
Today's world is expensive, and Israel is definitely no exception. Just look at Tel Aviv, which has the highest cost of living in the world.
To allow yourself to nevertheless save without feeling the pressures of other expenses, treat your investments and funds as expenses unto themselves.
If you don't trust yourself with that and worry that you cannot "trick yourself", so to speak, consider seeing if you can divert the regular investment amount straight from your paycheck so that you don't give yourself the choice.
Review and tweak your investments portfolio on the regular
Throughout our lives, our financial needs and responsibilities evolve and usually that means growing, too. You must therefore strategically reassess your investment portfolio on the regular to make sure it is up-to-date and relevant to all your present needs.
Review your expenses regularly and set your goals accordingly
Throughout our lives, we make massive changes. We have children. We change jobs. We move. Any kind of change like this can massively alter our lifestyles and how much they cost. Review your financial output on the regular to avoid feeling the force of such changes in a negative way.
This will allow you to change your investments and whatever other expenses need tweaking accordingly and ultimately you'll be able to save smarter and better.
Don't be wasteful
No matter how much we earn, it is likely that every month we spend significant amounts on unnecessary expenses. Whether it be shopping for clothes and jewelry or ordering take-out to the office, a lot of our expenses are wasteful.
Possible savings that can reach thousands of shekels per month oftentimes go down the drain as a result of the sort of negligence that surrounds wasteful spending.