Saving in Style: How to Improve Your Finance Savvy
Monday, July 17, 2017, 6:00 AM | Leave Comment
According to financial advisor Dave Ramsey, most people make money more complicated than it needs to be.
Although it’s possible to educate yourself on how to make better investments and how to be more financially savvy, truth be told, taking care of your money is actually pretty simple.
Most of the time, becoming financially savvy really is a matter of saving more than you spend.
If you’re trying to improve your budget and spending, why not try implementing these three ideas?
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Have an Emergency Fund
Emergencies are one of the reasons so many people can’t get their finances in order. Usually, people don’t have money saved to pay for emergencies if they should arise. This makes them resort to payday loans or credit cards to pay for their financial mishaps.
However, having an emergency fund for just such a purpose eliminates the need to borrow money to pay for things like car repairs or unexpected trips to the emergency room.
Dave Ramsey suggests people save at least a thousand dollars for emergencies. He also suggests that if you have to use emergency funds, plan on replacing that money as soon as possible.
If you don’t have an emergency fund set up, you should start one now and save until you have at least a thousand dollars in it.
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Home Improvements
Investing in your home counts as one of the best ways to improve your financial savvy, provided you do it the right way. Some home improvements come with higher returns on investment than others.
According to the U.S. News and World Report, adding insulation, a new front door, or a new garage door will bring you the most money.
Popular remodels like the kitchen or bathroom don’t make quite as much back. (Adding insulation brings a 108% ROI upon the sale of the home compared to the 65% to 80% that the kitchen does, for example.)
If you must make changes to these rooms, ask yourself questions like “Can I get a discount on countertops or cupboard by going to the auction or visiting their showroom?”
These are only sample questions. In general, for these kinds of remodels you should always try to find a discount.
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Start Budgeting
Knowing where your money goes and how much each of your bills costs you each month helps bolster your finances.
First, if you don’t have a budget create one. Second, you know where your money needs to go, then you can go through your budget line by line to determine where you can save money.
Maybe that means you won’t go out for coffee quite as often or maybe you’ll start bringing your lunch to work.
Any money you save should go first toward paying off debt and then into a savings or investment account of some sort.
Saving money is one of the big keys to developing greater financial savvy. Saving should be a simple, methodical process.
If you start by making a budget and then look for ways to save money and then invest it, you’ll eventually have far more money than you ever imagined.
The key to all of this is to be patient. Saving $10 today may not seem like much, but saving $10 a day or week or a lifetime really adds up.
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Eileen O’Shanassy is a freelance writer and blogger based out of Flagstaff, AZ. She writes on a variety of topics and loves to research and write. She enjoys baking, biking, and kayaking. Check out her Twitter @eileenoshanassy.
