Many people set financial goals, but not many people actually achieve their financial dreams. With the barrage of spending needs bombarding us daily, from mortgage payments to school fees to car loans, and other debts, it can be quite challenging to achieve financial balance in today’s world.
Perhaps you’ve found out that the charges you pay each time you withdraw are high, and you want to look for means to avoid it. Or, you have now realized that you spend more than you earn, so you want to start a serious savings plan for the future. That’s admirable because saving for the future means that you can now control your spending habits, keep a close watch on your bank statements, and ultimately provide yourself with an opportunity to enjoy financial freedom someday.
Becoming financially savvy starts by making a decision and taking deliberate steps towards achieving it. It may be challenging, but it is achievable. Here, in this article, we’ve compiled a list of seven amazing ways to become financially savvy.
1. Learn the basics of finance
A perfect place to begin is learning the basics of the world of finance. Understanding the nuances and Lingua Franca of the financial services industry can sharpen your understanding of what’s best for you.
How much are you paying on your mortgage, and how long will it take? What are the charges on your checking or savings account?
Interestingly, not many people can answer these questions with confidence. Reading up about current trends and services in the world of finance will arm you with the knowledge that you’ll be grateful for. Indeed, there will be promotional offers, savings plans, and interesting financial products that will benefit you on your savings journey. The best way to keep tabs on these things is by growing your financial literacy.
2. Make your savings automatic
Most people only save after spending. Interestingly, many people who do that have financial goals, but they’ve failed to realize that they’re using the wrong formula to get things done. And sincerely, that kind of savings method may not take you very far. To achieve your financial dreams, you’ll need to change things up a bit.
For instance, you can automate your savings. Decide on how much you want to keep aside in a dedicated account until a particular time. That way, you’re more deliberate towards saving money for tomorrow.
Create a target for your school fees, mortgage, or car purchase. Ask your bank account officer; they might have the perfect savings product for you. Waiting to save only after you’re done spending, is not saving at all. You’re only keeping what’s left. A serious savings plan requires more discipline than that. There are many other bank products and apps that can help you achieve this.
3. Pay off your debts regularly and on time
Many Americans live with debt, which can include car loans, student loans, credit cards, and a mortgage. If you’ve taken out a loan, it is advisable to stick to a consistent repayment schedule. Remember, the earlier you’re able to pay off the loan, the sooner you’re free to begin saving more money.
Debts, if not we’ll managed, can sink you faster than you can imagine. Also, if you do not have to take out that loan, then, by all means, don’t do it. Besides, a healthy savings plan involves becoming debt-free. Paying more than the minimum due is the best way to do that.
4. Create a reasonable budget and stick to it
Besides creating a savings plan, spending on a budget is probably the best approach to becoming financially savvy. This takes perhaps just as much discipline as it takes to stick to a savings plan.
The benefit is that you’re no longer an impulsive spender. You only put your money where it’s needed the most and not where you feel like. Creating a budget for your expenses allows you to save more. Eventually, you’ll begin to realize that most of the things you spend money on aren’t that necessary.
5. Regularly analyze your expenditures
You need to keep an eye on your debits and all outgoing funds. You may not be able to keep this up frequently, but you must take time to analyze your expenditures in order to know what your financial picture looks like.
There may be a redundant subscription that you need to stop, or maybe, a recurring debit on your credit card that you’re not even aware of. A periodic review of your bank and credit card statements will give you a holistic view of whatever is out of place. If you notice that you’re paying more for a service you can get for less, stop the debt and find a better alternative.
6. Speak to a Financial Advisor before making an investment
If ever in doubt about any financial commitment or investment, be sure to consult someone who knows more than you do. Chances are, you’ll be saving yourself some headaches and regrets later in the future.
Engage the services of a Financial Advisor or Financial Planner if the need arises; speak to your banker to get further details before getting that loan or buying that property. They’re there to help save you from the pain and regrets of making the wrong investment decision.
7. Negotiate before you pay
Many people think that negotiating makes them look cheap, whereas you may be saving some extra bucks if you do. Imagine the hundreds of dollars you could save each month if you tried to get the best bargain before parting with your money.
The thing is, most small businesses are open to negotiation and are willing to offer lesser prices and discounts if you buy in bulk.
The truth is, becoming financially savvy goes beyond the seven methods we’ve discussed. However, if you can internalize them, and maybe learn a few more, then you’ll be well on your way to true financial freedom.
Tycoono Media Inc. and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial and accounting advisors before engaging in any transaction. Please refer to our disclaimer for more information.