What Does “Financially Savvy” Mean?
You know those people who never seem to struggle financially at the end of each month?
They’re the ones who will likely cash in their stocks and savings to retire into a sea of green (dollar bills, y’all!) while everyone else is still trying to figure out when the next check is going to clear.
Being smart from the financial point of view will mean different things to different people. So why are do some people struggle with their finances, while others just seem to prosper and live in abundance?
People who are financially savvy made tweaks to their mindset and made sacrifices (significant or not) in order to maintain a high standard of living. As a result, they can pursue a variety of hobbies and travel without getting stressed about money.
They do this so they no longer have to struggle and worry about money…
Whether you’re starting to set your financial construction goals or trying to get back on track with your finances, the following top tips from financially Savvy people will surely change your life.
Financially savvy people plan and budget
We all want to live a life of abundance. That is my goal- to help everyone achieve that level of abundance….. until then…
…..a budget is necessary.
To be savvy in finance, you must have a plan for the future and manage your cash flow on a budget. A budget and a long-term plan clarify your objectives and guide your daily behavior so you can avoid leaving your finances to chance.
This is crucial to your wealth- building goals.
Your plan encompasses both long and short-term goals, and it includes leisure and purchase goals (such as holidays, house, and a car) as well as investment goals. Your plan identifies what you want and tells you how to get there.
On the other hand, your budget sets out the day-to-day things you need to do to achieve your long-term plans. You can use it to guide your behavior and make smart choices about everyday spending. Frivolous spending is not allowed!!
Your budget also lets you track, review, and adjust your spending and saving habits.
Budgeting doesn’t have to be time-consuming, complicated or painful. There are hundreds of apps or free spreadsheet templates that you can use to start budgeting today.
Financially savvy people find additional sources of income
Since we are talking about increasing purchasing power, how about finding more additional income sources? Whether you’re working on that e-commerce idea or driving for Uber in your spare time, additional streams of income will see you boosting your savings and wealth by not just cutting back on spending, but by maximizing your earning power.
Financial savvy people are not only cutting back in small and large ways; They are constantly looking for ways that they can generate $ 500, $1,000 or more each month.
By the way, please click this link if you’re interested in starting your own e-commerce business.
Start small by exploring your hobbies and talents. Do not rule out things like renting your spare room or using additional downtime for independent work.
While it doesn’t sound like much, an additional $500 a month translates to an extra $6,000 over the course of a year. Not bad!
This is extra money you can use to invest in shares, drop into an investment property, or fund another business project.
Keep emotions and money separate
We all should know emotions cloud judgment.
Money and finances are an emotional issue for most people, and financially savvy people have learned to keep their emotions at bay when making financial decisions.
This is true regardless of whether they choose to buy a new home appliance or make an important decision, such as buying a home or investing in a business.
When you surf online you must have seen a lot of advertisements related to your interests. These can stir your emotions, especially if it’s something you really want to buy.
However, financially savvy people know these advertisements are designed to influence you to buy, buy, buy! They are designed to make you confused which ones you desired and need, so beware.
Keeping your emotions in check means avoiding the temptation to excessively spend outside of your needs.
Read this article Are You Free of Financial Fear by one of the greatest motivational speakers in the world, Tony Robbins. He gives excellent insight into the quality of our emotions and money.
Financially savvy people live within their means
This means living within your financial capacity, or income. If there are items that you really need to purchase, you can check on other cheaper alternatives or wait until you have more money to use for it.
As they say, if you can’t pay cash, that means you can’t afford it. It sounds so obvious, eh?
But who among us can say that they have never crossed the line between what they can really afford and what they really want? But living beyond your means is an infallible recipe for stress, not to mention financial pressure.
People who are good with money are aware of living within their means. This is crucial to creating long-term wealth.
Financially savvy people prepare for risks
This is where your rainy day fund comes in handy.
Financial savvy people plan unexpected life events to protect themselves and their families. They are not affected by life’s unexpected events.
A good financial risk management plan should include an emergency fund (which could be equivalent to three to six months of subsistence) and possibly take out an income-based insurance.
Your risk management strategy will allow you to recover from setbacks more quickly. It can ensure you keep meeting your financial obligations in the event of sudden illness or unemployment- heaven forbid!
And That’s That!
So there’s my list of what financially savvy people ALWAYS DO that all of us should emulate. It might be hard at first, but that end result though…… woohoo!
You will feel more confident in your ability to handle your finances with such sagacity and ease like the mature, “diva-licious” person you are!