What is your money mindset? Personally, mine has evolved over time and whilst I’m no financial guru, I have the right to speak on the topic based on my experience and money journey. With that in mind, I want to share 6 audacious ways you can become more money savvy.
1. Educate Yourself
I wish I better educated myself about money in my 20s but hey, better late than never! There are a plethora of tools and resources out there that have the ability to help us become more money savvy. From books, podcasts, apps, articles and so on there is no real excuse for not upgrading your knowledge when it comes to money. Whether you need help getting out of debt, developing a stronger relationship with money, there is a financial resource within your reach – just ask Google.
2. Know What You Owe
This is an essential step towards being able to take control of your financial situation. I have a tracker with what I owe and a plan of action to bring me closer to becoming debt-free. Whilst it can be scary it’s amazing the positive impact it can have to know exactly what you owe because when you have that knowledge, you’re able to do something about it.
Take some time out to create a spreadsheet with everything you owe and include payment amounts for each month that ideally go above the minimum payment amounts. When you are able to visually see how much your debt could be reduced by over a period of 12 months, for example, it will give you the motivation and determination to stay on track.
3. Budget & Track
Track your income and outgoings like you are running a business even if you don’t have one and create a budget. Taking these simple actions will give you a clear picture of what you have (or don’t have), what’s coming up and where the gaps are. It’s not about living paycheck to paycheck – aim to have something leftover in your bank account.
Invest time each month to evaluate your financial position, understand where your money is going, where you may have gaps and how you can make additional income.
4. Build An Emergency Fund
There are different schools of thought on this and I’m no expert so I’m just speaking from my viewpoint and experience. It can be easy to go through life and think there is no need to account for something that may never happen. However, even if you have job security or have money coming in that you are generating from your own business anything can happen.
COVID taught us life has the ability to change without much warning and without having a financial backup plan it could seriously leave you in hot water. I know because I have been there and I vow to never go back there again.
Aim to save at least three to six months’ worth of living expenses. Set yourself a goal each month and set up a standing order for the day you get paid so the money is automatically transferred to your emergency fund and if you can, hide the account in your banking app.
5. Learn From Your Money Mistakes
What money mistakes have you made along your journey? I have made so many dumb ass money mistakes that I’m still paying for now but here’s the thing, making mistakes while managing money is normal. However, learning from those mistakes instead of repeating them and being able to get yourself back in a decent financial position is everything. If you do find yourself making the same money mistake don’t ignore it. Identify why so you can find a constructive way forward.
6. Practise Self-control
Do you really need that right now? Of course, we should treat ourselves and indulge in things that bring us joy and make us happy but one of the factors to contend with to become more money savvy is having self-control. Prioritise and reflect on whether you really need that product (or whatever is it) or not. For example, will it add value to your life? Impulse purchases which may seem small can add up so if you need to take a step back and think for a moment.
We live in the digital world where we can buy what we want from our phones and have it in our hands within 24 hours. Spend your money wisely to avoid making a financial decision that may negatively impact you in the long run and have you paying for it years down the line.