In an ideal world, everyone would be financially savvy. It would be easy to stay on top of our money and achieve the ambitious goals we set for ourselves and our finances. In reality, however, money management is not always so easy. There are many things to consider when it comes to finances and it can often be difficult to stay on top of everything. This can lead to ineffective money management and potential stress. To help you be as confident as possible with your finances, here are my top tips for staying financially savvy.
Tip #1 – Budget, budget, budget!
The best place to start when it comes to becoming financially savvy is understanding your financial goals. Do you want to grow your retirement savings, or get a head start on your child’s university tuition? Identifying what exactly your financial goals are will be the basis for building your budget. With these goals, you’ll have a roadmap. This roadmap will help you to understand how much you need to save each year. In addition, you will know how much you can spend so that you can be in a position to achieve these goals. When building your budget, it’s important to incorporate wiggle room for the unexpected. This includes things like expenses or events that might occur and throw your budget off-kilter. Once your budget is established, you will have a clear set of instructions to reach your financial goals.
Tip #2 – Don’t be afraid to ask for advice
When it comes to finance, there is a lot to consider. You have to think about your taxes, savings, investments, etc. Therefore, it can often be overwhelming trying to stay on top of it all. One of the best things you can do to stay financially savvy is to seek advice when you need it. Working with accountants and financial planners are just some of the ways you can better manage your money. Additionally, you will get the best possible advice for your situation. These professionals are experts and will often have suggestions or options that might not be available to you otherwise. It’s important to take advantage of their expertise!
Tip #3 – Pay off your debt
Debt is the biggest burden that can hinder your financial growth and wellbeing. No one wants to be restrained from achieving their financial goals because of outstanding student debts, credit card bills, mortgages, etc. Developing a strategy to manage your debt and pay it off as quickly as possible is a great starting point for becoming financially savvy. Start by tackling your largest form of debt and make a reasonable plan for how you can start paying it off. Once your debts are handled, you will then be liberated to use your income more effectively and strategically for achieving ambitious goals or investment opportunities.
Tip #4 – Increase your financial knowledge
Learning about finance isn’t always the most exciting thing. The more you know, however, the better suited you will be to make strategic decisions. Taking small steps every day or even every week to improve your knowledge is a great way to become more financially savvy. There are great books, podcasts, and YouTube channels that you can use as learning tools. Books like The Wealthy Barber by David Chilton and I Will Teach You To Be Rich by Ramit Sethi are fantastic readings for beginners when it comes to personal finance. If podcasts are more your thing, try So Money with Farnoosh Torabi or Smart Passive income with Pat Flynn. You can also learn some of the basics of financial literacy and mortgages in my recent blog post How do mortgages work? The lending process, simplified.
Tip #5 – Become great at saving
At the end of the day, saving is the best thing you can do for your finances. It is also sometimes the hardest thing to do. Creating an effective budget can help you with your savings. But, it’s important to also build a specific strategy for savings. Understanding how much you are currently spending to maintain your lifestyle and where exactly these funds are going can reveal great insights. You may discover areas where you may be spending excessively or unnecessarily. By becoming more aware of where your money is going and also becoming a better shopper through looking for deals and comparing prices, you can maximize your savings.
Looking for some more specific advice for when it comes to being financially savvy with your mortgage? I have many other great tips and insights I’d love to share with you. Call me anytime or reach out here to book your free consultation!