6 (Realistic) Tips to be Your Own Financial Planner

April 19th, 2020   ·   4 min read

Ever had your heart skip a beat as your bank balance loads? Feel guilty for that pair of jeans that you wanted to treat yourself with? Rely on packaged ramen for the last few days before you can cash in your paycheque to make it to the end of the month?

Ever had your heart skip a beat as your bank balance loads? Feel guilty for that pair of jeans that you wanted to treat yourself with? Rely on packaged ramen for the last few days before you can cash in your paycheque to make it to the end of the month?

We’ve all been there.

The truth is, maintaining financial wellness is no easy feat, despite what the countless Youtube videos, financial magazines, and self-care apps might claim. But let’s be honest; no one has the time (or the patience!) to meticulously count every cent that flows through their account or take out 4 hours on a Saturday afternoon to cut out coupons like Karen from www.financialhealthtoday.com. We get you — we’re busy people too!

But before you wave us off, it is important to know and care about how you spend your money; to put it simply, having good financial health means having one less thing to stress about. This could mean finally being able to pay off your student loans, or go on your dream vacation, or make your first downpayment for the house you’ve been eyeing. Not to mention, it could mean keeping enough padding around for a rainy day — you never know when the car is going to breakdown again (is it just us, or do cars just always breakdown at the most inconvenient times?)!

How do we achieve financial wellness? We’ve gone through the 500-page books and hour-long podcasts and boiled it down to 6 key points that will make you your own financial planner.

Tip 1: Know Your Number (Determine Your Net Worth)

We know, we know — numbers are never fun to keep track of. But this ballpark number is a number that you want to keep in mind. It is particularly important to determine what you actually own and have as a part of your patrimony to be better equipped to make financial decisions. Notably, this number could be helpful to not spend more than you actually have.

Tip 2: The Sky is (not your) Limit (Personal Budgets)

Setting a fixed amount to spend each month for specific needs is particularly helpful in managing your money and keeping up with your expenses. Now we’re not telling you to count your pennies everyday (but if you do — more power to you!), but keep a rough tab on your limitations for the month. We like to do it via free app trackers but you can put in a mental note, write it down, or physically portion it out — all up to you!

mastercard

Tip 3: Needs vs. Wants (Prioritisation)

We’re all guilty of this. You tell yourself you absolutely need those limited edition $300 dollar sneakers, so you push your phone bill to the next month, only to regret it when the time comes. Most of the time, the things that make us go off-budget are not necessary. It is crucial to understand how to prioritise compulsory payments before swiping our credit cards.

Tip 4: A Little Bit Goes a Long Way (Savings)

Creating a saving goal is helpful in increasing your net worth over time. A little here and a little there really adds up! Your savings can also be targeted toward something specific, such as a want, i.e saving to travel or to change your phone.

budget calculation

Tip 5: On Rainy Days, We Wear Raincoats (Emergency Funds)

An important pillar of financial wellness is the ability to finance unexpected financial shocks such as health emergencies, utility breakdowns, or even a global pandemic (bet you didn’t see that one coming!). Setting up a little fund on the side for a rainy day could help cushion you against any sudden shifts in income.

Tip 6: No Free Money (Debt)

It’s easy to borrow money then forget about it. But remember — debt increases over time! The more you delay, the more interest you are paying. Prioritise paying off your debts as soon as possible through saving up. No one likes a bad credit score, so try to get rid of it as soon as possible. And of course, avoid new loans unless necessary — and in the case absolutely need them, do your research beforehand!

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Congratulations — you’re one (or 6!) steps closer to being your own financial planner! Obviously, we know there are a multitude of ways that you can be smarter about your money, so share some of your tips with us below or connect with us on Twitter, LinkedIn, or website to stay up to date!

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