Knowing how to handle your money wisely is a natural part of being an adult, however, most people struggle with this aspect. If you are one of those individuals who find it difficult to manage your finances, here are easy steps on how to be financially savvy.
Make a budget
Being savvy is all about budgeting. In your budget, you need to list down your needs and wants. Needs include things that are vital in your daily living such as your groceries, car fuel, electricity, utilities, and more. On the other hand, wants are things that you like but aren’t crucial in your daily living such as concert tickets or morning coffee. Once you are done budgeting your money for your needs, you can figure out how much you want to spend on your wants.
Have a safety net
When talking about being savvy with your finances, it means having a safety net for emergencies. Most of the time, huge expenses are unpredictable and it’s essential to have some funds to rely on. Before you save your money for certain purchase goals, set aside 10-20% of your salary in your savings account. This stash of money will come in handy in case you face a financial emergency and they also accumulate a generous amount of interest in the long-term.
Monitor your spending habits
It is essential to be aware of where your money is going if you want to be good at handling it. Once you’ve already established a great budget, it is vital to keep track of your spending. You can do this by calculating how much money goes in and out of your bank account daily. One good thing about technology is you now have access to countless apps that could help you monitor your expenses. These apps offer budget planning features that are extremely useful for recording your expenses.
Pro tip: make sure to check your transaction history for signs of identity theft, fraud, or incorrect charges.
Limit food expenses
For some people, including yourself, food expenses might be one of the largest items on your budget. If you are meticulous with your money, then you are fully aware that your grocery expenses can improve just by shopping at the right store. If you want to increase your savings, make an effort to shop around. Go to different supermarkets and compare the prices of their products. You can also visit your local farmer’s market and local meat or butcher shop if you want to purchase items in bulk. They have an incredible selection of products and typically, they are much cheaper compared to your local supermarket.
Plan for your early retirement
Even if you might think that it’s still too early to think about retirement, it’s always better to start planning earlier. It is your best strategy to accumulate your retirement savings and have enough finances for the future. To start planning, contact an expert and research online to find out what suits you best. Even if you have just started and you’re still putting a tiny amount of money on your retirement savings, it will grow in the long run.
Ask financial advice from professionals
The thing about financially savvy individuals is they know the importance of asking for advice – whether it’s from a friend or an expert. It is hard to tackle investment strategies, tax, super, and other complicated financial jargons especially if you have no background knowledge about them. That’s why it is very important to talk to a financial planner, accountant, or any professional that could offer you expert advice on how to manage your money well. They are knowledgeable about every aspect that revolves around your finances, such as optimizing your contributions to limiting your taxes to maximize your tax outcomes. All of these professionals can also help you find the best saving and investment products so you can get the most out of your money.
If you truly wanted to save a lot of money, it all comes down to being aware of where your money is going and being picky as to where you should spend it. There is an important reason why companies spend a hefty amount of money on advertising – it always works! Do yourself a favor and don’t fall for advertisements easily. Practice being more aware of your money, budget your expenses and plan for your future now. Take note that being an expert with your money isn’t a one off deal. It takes a long time to establish your savings and form good spending habits.