As you ladies may know, a major aspect of personal and professional development is staying on top of your finances. In order to build a better life for yourself, excel professionally, earn a higher income (or even better, establish multiple income streams), you should first focus on getting to ground zero with your financial situation.
Here’s how to get started.
1. Tracking & Planning
In order to slay your finance game, you have to actually sit down and confront the scary demons of your financial situation.
That includes credit card stats, debts, monthly income, monthly expenses, past spending habits, everything. Once you’re clear on where you’re at, you can start planning a strategy for improving that situation. But if you never take the time to sit down face to face with the facts, you will just be causing yourself unnecessary stress and anxiety by prolonging the inevitable!
So rip off the band-aid and get down to business. The sonner you do it, the sooner you can make smarter, savvier choices that lay the groundwork for a brighter, more comfortable future.
2. Pay Yourself First (Savings)
Rule #2 to stay on top of your finances is to always always pay yourself first.
What does this mean? It means that with each monthly salary, your priority should be to put aside a certain percentage into a savings account, as back up for rainy days, contingency plans, emergency or medical expenses, car breaking down, etc. You do not touch this savings account.
The amount you choose to put aside is entirely your choice, but it has to be practical. You can’t make it too hefty of a sum, otherwise you’ll end up dipping into the account to cover expenses, which makes the savings strategy redundant. Even if it is a small sum, it doesn’t matter – what matters is that you start! With time, it adds up and you won’t even notice. The ideal amount, in my opinion, should be somewhere between 10% – 30%, but in either case starting with 10% is a great approach.
The best way to go about this is to set up a scheduled payment 1-2 days after your salary arrives, so you don’t need to expand any mental energy handling this month by month, it just happens. Automation will help you immensely: one less mental load regarding finances makes a huge difference!
3. Reinvesting your money
Reinvesting your hard earned money is a tricky business, but once you get in the habit of doing it, it will only reward you more and more with time. In other words, the ROI (return on investment) increases with time. Depending on your financial situation, reinvesting can mean:
- shares/stocks
- bonds
- trades
- real estate (receiving money from rent)
- reinvesting in your education and self development (courses, certificates, diplomas, degrees, trainings; health, skincare, haircare, fitness; etc)
- reinvesting in your business or side hustles (education via courses, seminars, certificates; buying more stock; investing in your webdesign or online platforms; investing in marketing and ads; etc)
4. Let your money work for you
A key mindset shift which will lead you onto a path of abundance is realizing that you don’t need to exchange your time for money.
Time + effort =/= money. That is the old way.
Instead, you can make your money make money for you. Confused yet? Don’t be. This is where passive income comes in!
Think of all the sidehustles and passive income forms that you can branch out into so that you can earn money even while you’re sleeping. Whether that’s an online shop with digital products, Print-On-Demand stores like RedBubble or Society6, ebooks on Amazon, affiliate marketing on your blog, or many more… there are hundreds of ways to add another income stream.
Here’s how it works: you get the job done once by putting in the initial effort, and once it’s done the product will earn your money for you. It’s done! It’s out there in the world. And then you can focus on creating more products, dipping your toes into new sidehustles… and rinse repeat!
5. Be financially savvy
Perhaps the most important part about staying on top of your finances is your mindset. Adopting a long-term, investment-oriented thinking for all areas of your life will help you immensely in making smart financial choices.
But what does this look like exactly?
- being more selective about the clothing you buy (having certain quality standards, preferences, ethical values, sustainability, etc), asking yourself certain questions before purchasing a new item (“How does this make me feel? Where can I wear it? How often will I be wearing it?”)
- being more mindful over your eating choices (homecooked healthy meals instead of ordering junk food)
- thinking twice before buying random things you don’t need just because they were on sale (“Do I really need this item? Is it essential right now or can it wait?”)
- instead of feeling guilty over making big purchases that are necessary, have a practical point of view: they are essential, they are an investment into your future, your health, your body
- “Do I really need this or am I just craving this item as a coping mechanism against some emotional/mental issue?”
6. Avoid further debts
Alongside following the above steps, you should take heed not to repeat the same mistakes by taking on more credit cards, debts, payments. Avoid them like the plague. They have their uses, but you should only opt for them in the last case scenario, if nothing else works and there is an emergency that is medical, health-related, or urgent, in that your family needs your help.
Do not , I repeat do not step into debt for trivial matters like a friend asking you to, or a boyfriend/partner asking it for any reason (temporary financial assistance or any other invalid justification – until you’re married you’re still single and owe no financial commitment to a partner), or similar situations. The answer is no! Only do it if it’s an emergency or you want to invest in your own home right away. Anything else does not warrant a valid reason for making such a huge decision, with consequences that you’ll have to support for possibly many years.
Ignore peer pressure and temptation. Don’t go out on a limb just to get that fancy car or equipment or laptop. You don’t need them. Instead of trying to impress people with your material belongings, invest your energy (and money) into your personal & professional development, it’s so much more rewarding. Be smart and choose improving your life integrally, instead of throwing yourself into debt to put up an aesthetic front to appease society. Your life is about you, not about them! Those little temptations may seem like a good idea at the time, but they’re an anti-investment to begin with. Credit profile, interest, other debts, long run… it all adds up. Regardless of your age, don’t shoot your future in the foot by taking on debts superficially. Your future self will thank you.
In conclusion, be very selective to taking on any (additional) debt. Emergencies only.
7. Financial education
The last – and arguably equally important – secret to staying on top of your finances is of course financial education. If you have grown up in a household where finances were a taboo subject to crack, or your upbringing simply did not elude to financial education as an important thing, don’t fret.
Financial education may seem like a daunting term at first, but as with anything else in life, the first step is the hardest. Acclimatize yourself to learning about money. Regardless of your age, background, history or anything else, everybody deserves to know as much as they can about such a vital aspect of their life. There’s nothing wrong, dirty or scary about finances. As of yet, they are a daily part of our lives and as such we need to be smart and savvy about how we handle them.
Start with reading a few articles online every day or every week. Compile a list of books that will elevate your mindset and change your perception about money and wealth. Open up your mind to new ways of thinking, new possibilities, new opportunities! Just like in your personal glow up journey, financial glow up also requires a mindset shift as it is essential.
If you are a more audio-oriented type, listen to podcasts or audiobooks.
If you’re a busybee, simply subscribe to online platforms focused on financial literacy and receive quick tips straight into your inbox on how to create a plan to chip away at any debts, or how to purchase your first house, or if nuptial agreements are important when considering marriage, or any other seemingly trivial yet helpful tips.
There are so many channels for growing your knowledge in this domain, all you have to do is start!
Stay financially savvy ladies, it will only further transform your life for the better.