You don’t need to be rich to be financially savvy – but you do need to know how to use money properly.
If you find yourself constantly struggling to make ends meet – and if you have thousands of dollars in credit card debt – something isn’t working.
The good news is, you can learn how to better manage your resources – and implement a few tips to help you get on track.
Make A Budget
All financially savvy people have a budget – they know how much money is coming in each month and how much is going out – but most important they know where it is being spent.
Take a look at your credit card statements and see what you are actually spending your money on – the results might surprise you.
Then, start to connect the dots and make a budget.
You can start simple with an excel sheet.
Make a list of all your set monthly bills like rent, electric, car insurance, student loan payments, etc – so you actually know how much your expenses are.
Next, move on to broad categories like food/groceries, gasoline, charity donations, etc – and figure out a budget on what you can actually afford to spend.
Yes, this might mean you might have to cut back on eating out and shopping – especially if you are going in the red each month!
Once you have the full picture of how much you make and how much you are spending each month – you’ll have a better grasp on what areas you need to cut.
Save And Invest
It might seem impossible to invest or save when you are barely making ends meet – but you can find a way.
Even if you start small with $20 a week – it adds up!
By contributing funds to a Roth IRA – you are giving money a chance to work for you.
Or, consider partaking in your employer’s retirement plan – especially if they have a match contribution!
It’s easier to save money you “never really get” to begin with because it’s being automatically invested.
You’re never too young or too old to start investing.
Pay Off All Debt
If you have debt – pay it off.
As quickly as possible.
Nothing zaps financial resources more than paying interest on a car, credit card, or student loan each month.
Whether you need to pick up a 2nd job, or forgo all eating out – do whatever it takes to pay it off!
Many find success with the snowball method – where you pay off your lowest debt first – then apply the money you were paying on that debt and apply it to the next lowest – and all the way up.
With discipline and consistency – you’ll start to see the momentum as your debt begins to shrink.
You Can Start Today
By applying these simple principles to your life, you can begin to turn around a bleak financial situation and begin to experience financial freedom.
Or, if you are not struggling financially, these principles will only help you to continue managing your finances well.
Don’t go into debt to buy the next greatest gadget – and make sure you know where your money is actually being spent.
Being financially savvy is a skill that can be learned by anyone if you have a teachable spirit!
Do you consider yourself financially savvy?
What are some ways you manage your finances that have proven to work well?
Tell us your thoughts in the comments below and be sure to share this article with your family and friends!