It doesn’t matter how much you earn, if, in a week before your salary, your account balance is close to zero, you need to improve your financial awareness. Basic financial literacy will help you not only to break even, but also to improve your situation and get some savings, and most importantly, grow. How to manage that? Here are several crucial tips to help you manage your money more efficiently.
- Spend less than you earn. This is the primary thing that can help to improve your financial literacy. It seems to be the obvious thing, but, according to the general bank statistics on credit cards, most people, for some reason, continue to ignore this advice. A rich man is not the one who earns a lot of money, but the one who spends less.
- Set your goals. Another tip on how to improve your financial literacy. Saving in the name of saving can hardly be called the right motivation. Setting specific financial goals works much better.
- Prioritize your debt. If you have debts on bank loans or credit cards, try to arrange them in order of priority. The point is that the mortgage with the highest interest rate must be the first on the list. It must be paid first.
- Control your budget. Several specialized applications for home accounting will help you with this. Such special software will significantly simplify this task, but this is the first step on the way to controlling personal finances.
- Create a reserve fund. All the books on financial literacy in one form or another contain the following phrase "pay yourself first." That is, no matter how low your income is at the moment, how much you need to repay debts, you must find at least some amount to put it into your “reserve fund” every month.
- Diversify revenues. If you decide to start saving and close all issues with your debts, it is likely impossible in your current position. Not everyone is ready to consider the quitting option and find a better-paid job. Therefore, try to look for additional sources of income, such as freelance or part-time in the remote work form.
- Buy practical things. The word practical is not synonymous with the word cheap. A car clearly does not belong to the items of the lower price segment, but it can be very practical – inexpensive in keeping with low fuel consumption. At the same time, it performs its primary function as a means of transportation. The same applies to other things.
- Feel free to ask for some extra money. It is not a problem to quit and leave for a new, more paid job nowadays. But what if everything suits you in the current place? In this case, talk to your manager about a salary increase. If you get an increase – that’s great. If not, you can leave to look for a new place to improve your financial situation.
- Take specialized financial courses or training. You need an integrated approach to such a complex issue. The best way to get it is by basic financial literacy training in order to get specialized financial knowledge and skills. You will be able to practice, and besides, they may point out your errors. You can find lots of those in a training services market.
Do not be afraid to try some new things. Remember that only if you exit the familiar established system, you can get the desired result. Never stop improving your financial literacy.