A Beginner’s Guide to Financial Success
The hardest part about managing your finances is getting started.
Once you have some structure in place, checking your money becomes a chore and it’s easier for you to make decisions along the way. But “structure” does not mean that you budget once and then forget about it. This does not mean opening a retirement account and hoping that it will make you a millionaire.
You have to take care of your money regularly. To stay on track, you need to visit (and revisit) the most important part of your financial toolbox.
Budgeting
You can’t figure out what to do with your money if you don’t know what you are working with.
There are a million and one ways to budget, but if you’re looking for a way to get started without judgment, try the Kakeibo method , which will group your money into just four categories for a quick overview of what works and what doesn’t.
If it’s too difficult at first, break it down into bi-weekly segments rather than monthly ones.
And if you’re ready to get back to basics once and for all, how about taking it as a base with a paper ledger? Maintaining it even for a month will ensure that you keep track of your budget every day.
To save money
Once you have control over your budget, it’s time to step up your savings efforts.
So what about these emergency funds that everyone is talking about? Experts say you should have enough money to cover expenses for three to six months in case you lose your job or have to make an unexpected purchase. But in the end, the correct amount is up to you. Obviously, the more the better. But if the idea of saving six months on rent / utilities / food / transportation makes you wheeze, any amount will help provide a financial cushion.
A great place to store your emergency fund is a high-yield savings account that earns interest while you enjoy as many emergency-free moments as possible. Here’s how to pick one .
If your budget is becoming more stable these days, that doesn’t give you carte blanche to spend. Every time you get a pay raise , make sure you invest in the places that are most important to you.
Banking
When it comes to banking, we have one piece of advice to manage them all: Stop paying commissions. Banks love to charge you money to save your money for you to access your money to support you if you accidentally run out of money.
If you need a little motivation to change banks to avoid unpleasant fees, we have a lot of support for you:
Happy with your bank? Make sure you still keep track of your money by setting up alerts and notifications .
One more thing: the checks are still there. I’m sorry, but it’s true. If you don’t come across them often and don’t know what and where to write a check, we have a guide for you .
Use of credit
There are personal finance experts who think that using a loan is always a bad idea. But not us – we recommend using a loan as a tool to help you achieve your financial goals. However, you need to tread carefully.
First things first: you must understand the magic formula that is used to create your personal credit score. This guide outlines the parts of your bill and why it is so important to pay on time and keep track of your expenses:
Oh yes, how important it is to pay on time. To ensure you never miss a payment, let technology do the work and automate the minimum credit card payment .
If you’re ready to earn points or miles to redeem for rewards, we have a beginner’s guide to help you understand how it all works:
But whether you are trying to earn miles or simply increase your credit score, make sure your loan is as secure as possible. Freezing a loan is free and one of the easiest ways to prevent fraud and identity theft.
Investment
Is the budget organized, the savings are confirmed, the loan is managed? Time to invest. Take a mental picture of traders screaming on the floor of the New York Stock Exchange – your experience will not be like this. Instead, as a beginner, your best bet is to create a simple portfolio that doesn’t require much maintenance.
There are many other aspects of personal finance, from buying a home to paying for college . But for now, focus on the basics – you’ll be surprised how much they can help you achieve financial success.