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5 Best Finance Tools for Managing Money (Quickest yet Safest Ways towards Financial Freedom)

Updated: Mar 29, 2023


By: Angel Cabby, Hustling Inspired Mom


My blog contains affiliate links which may allow me to earn commissions if you decide to purchase from these links.


Career and wealth-building opportunities have been more present more recently since the past two years - thanks to social media that publicized these new ideas allowing better financial independence. Remote jobs have become more available, allowing individuals to work side hustles besides their full-time work, offering better flexibility, and the possibility of achieving financial freedom earlier on in life. Opportunities to build wealth and better money management, such as financial life tools including software tools, especially for individuals with dependents within their families, have become easier to come by through online research. The best personal finance books in online form are more easily accessible and more available than ever.


As I've heard time and again from my parents from the time I was a child until having been married, this always comes up: "it's not about your humble beginnings, or how much money you earn, but how you find ways to grow your earnings for your financial life" - as well as retirement planning, and building your emergency fund that should be the strategy in managing money decisions while ensuring taking risks that are appropriate based on your stage in life - your age, your earning potential, and either if you have dependents or not, and also how to eliminate unnecessary risks. To save money is typically the most straightforward, most conservative, and safest way to build finances especially with a looming recession - while also eliminating or minimizing debt and expenses. However, at some point, my opinion would be needing to refocus on value investing - which could be stock market, real estate, index funds, or building your own business, especially if you have built an established safety cushion by building healthy savings.


Currently, we've been hearing on the news a lot of layoffs as companies downsize from the economic boom we had in the past recent years. To maintain a healthy financial life or obtain financial freedom - freedom from living paycheck to paycheck and having the option to manage well your personal finances, and earn more money - I recommend five basic, conservative, adequate yet best personal finance tools for building wealth to prepare for a stable, financially protected future, or could be to achieve financial freedom as early as possible, especially if you have dependents or are a middle-aged family man/woman like me. The five personal finance or "money tools" I recommend are life insurance, emergency funds, digital hustle, establishing budgets, and investing that aim to support long-term financial stability.


Five Best Tools for Managing Money (the financially conservative way)

1.) Life Insurance


As a parent with toddlers, my priority is to protect my children if something unexpected happens, such as through life insurance as a practical example. Ensuring your beneficiaries can access tax-free resources from the proceeds of your life insurance can hugely impact your dependents' financial planning and future and can be the best finance resource for your dependents later in life. So your beneficiaries have immediate access to your life insurance's profits, you should name a trustworthy trustee until your dependents have reached legal age.


I recommend term life insurance due to being less expensive compared to other forms of life insurance while giving you the flexibility to divert your additional allowance towards higher-yielding investments or other market instruments, or to allocate to additional spending budget or savings. Seeking advice from a financial advisor or a licensed insurance agent may be more helpful, especially if you have specific personal or life circumstances. Policygenius can be a helpful tool that shows comparisons among different insurance providers that best suit your life insurance-specific needs according to specific costs and coverage.






2. Emergency Funds


Since late 2022 and currently in 2023 - the complete irony of 2021 which saw a labor shortage, layoffs are becoming more frequent while economic conditions have shifted that call for better money management or more robust personal finance. Because of an expected recession to take place any time soon, it is absolutely necessary to save more, and control unnecessary spending. Traditionally, I would recommend keeping 3 to 6 months' worth of household expenses in your savings account, which includes rent or mortgage, utilities, food, tuition, car payments, etc. Due to current economic conditions, I recommend at least 12 months' worth of household expenses, or even more, as reserves for emergency funds or savings for better flexibility. Typically, if you foresee your field of work as recession-proof compared to others such as being in the medical or accounting field as examples, or working in an industry that provides "necessary" goods and services to consumers such as food, utilities, etc. you are more likely to have better job security compared to other industries, although there's always no guarantee in this world as we all know.


Another option is investing your excess emergency funds reserves in money markets that yield higher interest rates than savings but are safe investment vehicles. Although big banks have collapsed recently or are deeply troubled such as Silicon Valley Bank that generally catered to startups or venture investors, our local banks, or banks focused on households should be a safe haven for storing our hard-earned money. Deposits up to $250K are secured by FDIC, or the US federal government. I would suggest that to take control of your funds, you need to ensure that your money at one bank doesn't exceed $250K. Its pays to save money especially during a recession, or pre-recession - even if in small increments, because of your better advantage - better peace of mind - if you are more liquid. During the recession, money supply is more limited and generally, we see capital markets selling financial instruments more cheaply, as well as real estate demand becoming lower and therefore, driving prices down. After establishing an optimum emergency fund, it's always ideal to taking control of your future by paying yourself - through value investing at a time when investments can be obtained much more cheaper during a recession or economic slowdown - and therefore, grow wealth more easily.


As Dave Ramsey, a Finance guru I look up to, has mentioned, one of the most important, best personal finance initiatives would be to eliminate debt. Doing so, you will be empowered to living your best life without being limited by debt. In other words, true financial freedom. For additional self-help guide for managing personal finance such as simple steps to manage debt to help you better obtain more money to channel towards your emergency fund, investments, or other spending, I would suggest exploring the below Finance Self-Help Guide.






3. Digital Hustle


Besides your full-time work, keeping a digital side hustle is also worthwhile because of the flexibility and almost zero to the low cost of starting your own business with opportunities for passive income. Taking control of your time is also one of the best features digital side hustles can offer and therefore, provide better balance in your personal or family life, besides strengthening your finance life. Digital side hustles can impact financial planning by providing additional income streams and investment funding. Everyday digital side hustles are available through affiliate marketing, blogging, offering courses based on one’s expertise, virtual side jobs, etc.


One of the most lucrative remote roles right now is in SEM and SEO that support scaling affiliate marketing. I personally believe that value investing in digital hustle tools or applications is one of the most promising investments especially if you are planning to make sustainable side jobs that can be done online and remotely. To provide an overview on affiliate marketing, the below link might be helpful to help you get started with your digital side gig.






4. Establishing Budgets


Being in the Finance profession, I would say the core of financial planning depends on how you establish and commit to your household's budget - tracking your income and expenses, comparing alternatives that can help you lower your costs, and having a reasonable forecast of where you expect to land financially by the end of each day, week, month, or year, cash flows-wise. Being mindful of what your cash position would be at a specific period gives you a perspective on improving financial decisions to support your achievement of future goals - be it to have a sound and comfortable retirement, paying off student loans, or just being financially free from any debt. The repercussions of staying committed to your budget leads to better money management and best personal finance practice you can possibly achieve.

Being consistent with your budget and tracking your money goals can be very powerful especially in the long run. It can absolutely help your retirement planning, obtain financial freedom, avoid money mistakes and spend less, and boost your net worth.





5. Investing


A Finance professor emphasized to our class almost 20 years ago, which still rings true to date, that one's highest source of income is from investments and not from one's line of work. And that is due to compounding interest rates and the time value of saving money in investment vehicles such as stocks, stock indices, ETFs, etc. Real estate investment is another vehicle that supports excellent financial planning due to tax incentives for owning investment real estate properties. In addition, the property value appreciates over time - all while receiving rental income to add to one's cash flows monthly. Value investing in new skills such as digital marketing is another avenue to building wealth.


For safer vehicles to invest, I would recommend investing in index funds such as the S&P 500 that has consistent average yearly returns of at least 10% or owning investment real estate properties since real estate has proven time and again that in the long run, real estate properties always appreciate despite economic downturns or expenses tied to maintaining an investment real estate property.


Although the Fed has increased interest rates making house purchasing more difficult since second half of 2022 until now, it would be worth a shot to capitalize on good real estate purchases that would hopefully provide better profit margin and long-term property value appreciation, and therefore boost your net worth. I hope the below link would provide helpful insights on real estate investing.





Best Finance Strategy: It's all about managing money to align with your personal finance goals and maximizing your resources


Riskier bets than the five best finance tools I suggested above are absolutely available to maximize higher financial returns that can funnel additional proceeds to one's financial planning goals. However, being more conservative with my financial decisions by focusing on the above five family financial planning tools I mentioned above especially with current economic challenges we are facing, and based on my current capacity to embrace financial risk, is most feasible on my opinion. There is no doubt that eventually, in a year or two, based on economic, historical trend, our economy will be bouncing back - as part of the booms and downturns of an economic cycle. However, to ensure I am adequately protecting my family during economic uncertainties, while building on a sufficient emergency fund, I believe it is still necessary to be proactive in utilizing financial tools that will support you in managing money, building wealth, and obtaining financial strength or independence especially if there are opportunities, resources and tools available to you to help you achieve your financial goals.


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