10 Personal Finance Rules To Follow If You’re Taking Time Off Work
First, mark the separator as firmly as possible. Why you need a vacation in the first place will determine that. If you are planning to study for a competitive exam and cannot do it alongside a full time job, give yourself a set number of attempts to do so. If you are planning to start a business, decide the period during which you want to make profits. If you are switching jobs, determine how long you will be without income. Without this achievement, you risk prolonging your rest period and insisting on something not working.
Second, the spacer needs a group to support it. But this doesn’t always have to be great. If you have big and critical financial goals, you’ll want to save for them. A big financial goal is one that needs more funding than your regular and routine income; It is critical if it is to be financed. You can leave annual leave, but you may want to send your child to the school of your choice. The objective can be funded from an asset, as long as you are able and willing to liquidate it. Sell that third suburban apartment but don’t liquidate all the assets into cash flowing into the bank.
Third, you do not have to replace your current income when you are on a break. Your income usually finances your mandatory and discretionary expenses and leaves a surplus for savings. You don’t need all of that when you’re on a break. You definitely want to cover mandatory expenses. Save less for discretionary spending and skip the savings routine. You can go back to all of that when you start a new career. Estimate this monthly amount that will keep you comfortable and not worry about routine expenses. It is sufficient to provide it.
Fourth, if your vacation includes new spending, be sure to include it in your estimates. One of her friends wanted to pursue a modeling career and gave up her full-time banking job. She soon became indignant at the amount of money she had to spend on clothes, accessories, beauty treatments and a gym routine. Cutting corners is hurting her prospects and excessive spending has left her restless. New business starters find themselves on the verge of running out of working capital sooner than they thought. Your vacation needs a business plan like prep, don’t cut short by changing it.
Fifth, do not pressure the risky assets with the group you created for your new quest. Even worse, don’t lock it up in land or property. The funds you have estimated and set aside should ideally be set aside in a balanced portfolio of equity and debt. enough debt to support your need for regular income; Stocks to keep the stock pool growing so that money you don’t use immediately can increase in value. Trading in derivatives and buying lottery tickets will not make you rich.
Sixth, be careful when finalizing large expenses. I have met many retirees who rejoice in their huge collections and spend lavishly in the early years. They assume a second career can wait while they enjoy the fruits of their many years of work. By the time they realized they needed to work again, a large portion of their group had gone into home renovations, gifts and donations to children and grandchildren, and spent away travelling. realistic estimate. Invest to provide an income that keeps you sane and then see if there is a surplus to indulge in.
Seventh, make sure the basics are in place. It’s a bad idea to take a breather when there are loans outstanding. Remember that your estimate of mandatory expenses should include all the equal monthly installments that you still have to pay. It can be a burden. If you can’t pay off your credit card in full each month, stop using it. If you have to borrow, rely on friends and relatives so that your repayment terms are more flexible. Beware of losing relationships if you default on them. Ensure that you are fully insured for life and health.
Eighth, list and rank your assets. These are the things that you will resort to if your plan encounters risks that you did not anticipate. Do not mortgage or mortgage your assets, unless you see an income stream in the near future to pay off the loan and restore the assets. Make sure you know what assets you want to liquidate to fund your break. Keep the papers in order – you don’t want to find out that your estranged spouse is a partner. Liquidity is the only characteristic that your assets should have. The written definition of liquidity is the immediate conversion to cash at fair value and zero cost. You can’t achieve that distinction, but make sure your assets are close enough.
Ninth, work with a trusted partner who knows your plan and will guide you. Not having an income can create fears that are difficult to deal with. You will fall into the trap of denial if you deal with it alone. A spouse, relative, or friend—someone who knows you well enough to hold a mirror to your face when you slip—should be available to guide and guide you. Many financial mistakes are avoided when another independent voice tells you about the risks you’re ignoring. Sometimes, you need a boost to work.
Tenth, make sure that you have made the decision to take a break and you will accept the consequences. You will not complain or blame, consider yourself unlucky, or imagine that the world is against you. You’ll pre-determine as much as you can and manage it as you go forward, hoping to work within a set schedule. Your finances should support you and your family while giving yourself this time advantage. Always be responsible
The author is president of the Center for Investing, Teaching and Learning.)