Smart Money Moves – 2020 and 2021 have been traitorous years for many of us. One could even liken it to the worst roller coaster ride of their life. First, a strange pandemic caused many folks to dig deep into their pockets to pay medical expenses.
Then, the stock market crashed, which paralyzed businesses for months. Because of this, many folks suffered and lost their sources of livelihood, except for a handful who made exponential profits.
In this article, we’ll be talking you through some money moves that might have saved you through 2021. And they will indeed ensure you reach your financial dream of prosperity in the coming years. Here’s our very own customized list!
9 Smart Money Moves You Can Make For a Prosperous Future
1. Define and find your savings goal
This coming year should be the year of change for your savings goal. Don’t only think about investing money into your savings account. Instead, consider defining what percentage of that money is intended for different expenditures. And I’m not suggesting that you open up savings accounts for entertainment, revamp, and furthering your education. No! What I mean is that you should have a very detailed layout of what amount of money you’d like to go into each project. You could think of the projects as little piggy banks with stickers on them, indicating what purpose they are to serve.
The logic behind this is that you’ll be able to treat it like a daily budget, Where every coin is allocated to facilitate different accounts, rather than having unplanned money for which you don’t know what to use. For example, such as may be spending the extra money on frivolous expenses, which you’ll later come to regret. This will help you keep track of your financial goals while allowing you to remain disciplined with your savings. That way, you won’t end up blowing through that cash come Christmas holidays. Nonetheless, when it comes to what saving piggy banks you should have, is personally up to you. Once you get the hang of it, you’ll realize how much closer you are to realizing your dreams.
2. Make a plan to pay off debt.
If you’re planning to carry debt into the new year, I highly suggest you don’t. Carrying forward high-interest debt is dragging you further away from the financial success that you dream of. It’s wise to take some time to write down all the debts you’ve acquired over the years. Ask the lenders how much money you owe them and how much interest they will be charging you going forward. After you’ve done your research, arrange these debts from the one that is costing you the most to the least. That’s in terms of interest rates from the highest to the least interest time. After you’ve done this, consciously review whether it’s wise to continue delaying the loan repayment.
Another option is for you to consider laying the biggest debt in your books first. Then you can slowly work your way down the chain. Just make sure that you pay your debt religiously every month or whatever is specified. To avoid having fines added on to your debts. This money move is sure to set you free from the shackles of debt and drive you towards financial freedom.
3. Build a good credit score.
I know many of you hear the word credit and immediately go running away for cover. But fear not because credit isn’t all about bad vibes. Building a good credit score is better for you in the long run. This is because you’ll need a good credit score to purchase a home for yourself. You could even get a better deal than the one you initially thought you’d get due to having a good credit score. Another perk is that you can get better terms for any loan you’d like to get. This is a bonus for business owners because sometimes, you are in desperate need of a cash boost.
Unfortunately, the only way you can improve your credit score point is by first acquiring credit. If you use it diligently, then you’re setting yourself up for a brighter tomorrow financially.
4. Grow your emergency fund
I started by telling you to open an emergency fund, which by now, I hope, is up and running. The next step is to focus on growing your emergency fund. By this, I mean you should have a goal to save up enough money to sustain yourself for up to three months. This is actually on the lower side. Experts suggest that the best emergency fund can sustain a person or a family for six to nine-month. That’s if you work a 9 to 5 job daily. For those of you who have a more irregular income should aim at a 12month sustainable emergency fund.
Setting up this fund doesn’t take long, but it will take some time to grow to its full potential. Sometimes it may look impossible because you feel like you’re living hand to mouth. But trust me, those couple of dollars set aside every month are going to add up to something big. On top of that, you need to set a very realistic goal of how much you’ll set aside monthly. This is before you even tackle any other expenses. Ensure that it isn’t too little, nor is it too strenuous to your daily budget. By securing your future, you’re sure to withstand any financial constraints bound to occur in your life.
5. Create a budget
Budgeting is the word no one wants to hear but the cornerstone of wealth and success. If you have a detailed definition of this term, it suggests you take time to reevaluate and redefine it. I bet your parents don’t nag you enough about getting your budget in order and keeping it in check. But this is the secret ingredient that will set you apart from a lot of people in the financial world.
Some of the things that you should have in check in your budget are :
- Have a number in dollars of your monthly savings checked. Also, ensure that this amount is standard across all other months. If it ever changes aim that it changes going up and not down
- Have exact numbers on how much debt you owe and when it is due to be paid.
- Structure your expenses.
- Know how much you spend on bills and any other item or service outside the budget.
- Know how much income you make per month and how much of it you spend.
These pointers will alleviate you from the delusion that your finances are going great, while, in a real sense, you need savings. Trust me when I say that nothing can beat a good budget!
6. Ingrain the habit of ongoing education
I read somewhere that all the wealthy people in the world have one thing in common. And that is their ferocious appetite for educating themselves. They’ve proved that education is a never-ending process. There are no timelines to when it should end, and that is exactly how they’ve acquired so much wealth. Your greatest goal shouldn’t only be to acquire that all praised degree.
Or an additional financial certificate. Read books on how to make investing worth your while. Read stuff that sparks your interest because you never know how this will benefit you. I can promise you the difference between the employees who get promotions and those who don’t lie in reading. If you can build this culture in your 20’s that is even better. Because you’ll be opening doors for many career opportunities that will assure you a bright future. So, go to the library if you’re old-fashioned or indulge in ebooks, newsletters, Or whatever other literacy information you can get your hands on.
7. Denounce the status symbol
Forget about YOLO living because there’s nothing you gain from showing off to a bunch of random people. Steer yourself away from flashy cars, houses, and lifestyles just so you can fit in with a crowd.
A good size of today’s population is spending more on depreciating assets. Those that can only bring momentary satisfaction. Let me remind you that cars depreciate over time. And that’s after you’ve spent a good amount of your money trying to maintain it, feel it, and pay for insurance. I think we are better off without cars because fewer cars mean less pollution and time wasted in traffic. Also, less financial baggage trying to keep up with car expenses. Don’t get me started on how much you’ll have to pump into your car in case of an accident.
Focus on your own bigger picture, like living a comfortable life in five or fewer years. If you do that you’ll realize that there is no shame in buying preloved clothes. You’ll also be saving the planet from waste caused by fast fashion. Buy a workable phone that serves your purpose effectively. Take care of it so that you don’t have to buy a new one every other week. Finally, there’s no glory in always eating out. All that expensive food will end up down the same drain. Be smart enough to avoid those copious costs, and you’ll see that you have more than enough to save.
8. Start a side hustle.
I know that starting a side hustle is always a daunting decision, where you are caught between two possibilities, in one, you wonder how great you can make it. While on the other hand, you are terrified of losing your main source of livelihood before the side hustle kicks off and stabilizes. There’s no need to put yourself through such strain. Because you could always start something small that you can work around after work hours and weekends. I don’t want to write a list down for you of all the things that you could do because I’m a firm believer that your side gig should arise from your hobby.
Something that you love to do and will enjoy doing every single day without being pushed. Try out as much as you can until you find the one that you are in sync with, then flow with it. If you don’t get a good amount of cash from it, you probably will get invaluable lessons from it.
9. Find a mentor
I know you’d like to think that you can make it on your own as a one-man army. But the truth of the matter is that a mentor will make winning the battle easier. This is because they can help you navigate through certain pitfalls you’d never expected. This is especially true if you have a mentor who knows the tricks of the trade-in your line of interest. Better yet, these mentors can create a strong network for you to work with or associate with.
You’ll have even greater success if you have more than one mentor. If you find people who are willing and are good at advising and directing. Hold them close for your dear life as these are the people who are sure to put you ahead in life. Don’t make the same financial mistakes your parents or older siblings made. Because no one ever said that financial awareness must begin at 30. You can achieve so much more in your prime 20’s or even younger. I dare you to be different and show the world everything you can do despite your young age. Till next time guys, remain daring, remain brave in your wealth journey, because who knows what you might end up achieving!