How To Get Money Savvy In 10 Easy Steps
Managing your money is a skill that you can learn. Even if you think you know enough, there is always something new to learn about growing your wealth.
2021 is the best time to become savvy with your money. We learnt the hard financial lessons last year and now it is time to use those lessons to build a better financial future.
Step 1 of becoming money savvy is to get clear on where you are now. This requires you to be honest with yourself. This exercise may bring up different emotions and that is okay. It is important that you feel those emotions and ask yourself why. For many people looking at their finances brings up negative emotions and can leave them feeling guilty, regretful and frustrated. Do not let this deter you. Take the time to recognize how you are feeling. This is an important step in your money journey.
Life is like a game of snakes and ladders. You never know what the next roll of the dice is going to give you. It could be a snake(threat) that could cause you to regress in your financial life. Or it could be a Ladder (Opportunity) to take you to the next financial level of success.
So, if life is so uncertain and the world, we live in now is so uncertain how do we mitigate the risk or the snakes in our financial future?
Gone are the days when the mom stays home to take care of the kids while the dad goes to work. I was fortunate when I was younger because my mom stayed at home. She on the other hand was totally unfortunate. When her and my dad divorced at 40, she had to start her life with nothing, never having worked and having no real skills.
South Africa is a buy-now, pay-later society. The effects on young people’s financial literacy are thus characterised by the same behaviour patterns as parents and society. These are high credit and high consumer behaviour with very little savings, and in turn high social risk behaviour. Money Savvy is working to change this disastrous pattern.
The first time I ever did a value exercise I was 38 years old. It was an interesting experience because I had no idea what I valued in life or in my financial life. My top value at the time was family. What was scary was I was not living up to my core value in any way, shape, or form.
The first time I set a financial goal was when I was 32 years old. It was a skill I needed to learn. I needed to formulate a plan to achieve my goals and I can honestly say that goal setting was one of the biggest drivers in changing my financial situation. I still set goals for myself each year because Goal setting gives meaning and direction. Setting financial goals helps us focus on our finances.
Setting goals marks the beginning of financial planning to help you achieve your goals and objectives at various stages in your life.
How would you define your money mindset? How do you feel when you look at your finances, earn money, pay bills and talk about money? For many of us money brings up a lot of emotion. For some it can be positive, but for many it is negative. We feel dread when we see bills and guilt when we look at our current bank statement. It is important to become aware of these emotions so that you can process them and work on creating a money mindset that makes you feel good and helps you work better with your money.
“Growing your wealth” seems to be the new buzz word around town. Most financial institutions are trying to educate “the man on the street” about investing and trying to get them to use their platforms. That’s how easy investing has become. There are online platforms you can start to use to trade shares, bonds, ETF’s and more. These institutions have made it very simple for us to try our hand at investing.
When it comes to your financial security, it’s all about planning and long - term goals.
South Africa is a buy-now, pay-later society. The effects on young people’s financial literacy are thus characterised by the same behaviour patterns as parents and society as a whole. These are high credit and high consumer behaviour with very little savings, and in turn high social risk behaviour. MSK is working to change this disastrous pattern.
I have had to manage my own budget fairly tightly since the first hard lock down started a year ago. With a few months of zero income and being forced to spend my savings, I knew what I needed to do first to make sure I was not spending more than I earned. I relooked my budget and was ruthless at cutting costs. I even cut my food budget in half and spent more time cooking and planning my meals better.
When was the last time you relooked your budgets? How often are you even checking your bank statements to be sure where all your money is going?