Ironically, most of the people who need a financial advisor are those who can’t actually afford it. However, becoming your own financial guru might be challenging, but it’s far from impossible. All it takes is some research, a lot of effort, and good organization. So, if you’d like to be in control of your own finances instead of worrying about money every month, here are a couple of suggestions that might help you.
Determine your goals
One of the most important steps in becoming your own financial advisor is determining your goals. After all, how can you organize your savings if you don’t know what you’re saving for? Knowing your goals can help you see how much you need to save and what the best way to save money is. Moreover, if you have more than one goal, you should also have more than one plan; you’ll need to decide on how much you need to save weekly, monthly, and annually in order to eventually reach all your goals.
Also, all the money you need to save should be treated as fixed expenses – you’re not allowed to take $50 out of your savings for a new pair of shoes or jeans. If it’s meant to be used for your next vacation or education, then it doesn’t exist for any other purpose.
Know where you stand
Once you determine your goals, it’s time to see where you stand. You should know how much money you have and how much you can earn each month. This way, you’ll be able to see which goals are easier to reach and which might take some time to become more attainable.
Moreover, assessing your current situation can be as simple as writing it down. For example, if you’ve been using a spending diary, you should be able to see how many things of those you’ve spent on were actually needed. Write down the cost of each unnecessary item and count the total price – that’s how much you can save every month if you just stop buying unnecessary things.
Create a financial plan
Knowing your current situation and your goals will enable you to come up with a suitable financial plan. The main thing to do is to prioritize all your wants and needs and adjust them according to your monthly budget. This way, you’ll know what you can afford and what should wait until some more important needs are taken care of.
An essential part of becoming your own financial guru is also knowing who you are, what your strengths are, and what weaknesses you have. For example, is earning money easy for you? Do you often buy things on impulse? Are you good at saving up? All of these things should be kept in mind when creating your financial plan.
Think about the future
When it comes to planning, you should plan not just months in advance but years. Therefore, do some research on age pension rates so you know how much money you’ll have once you retire and what you can do to improve your income. This will also allow you to stay focused on the more important financial goals, which will ensure you a safer and happier future. Plus, knowing that you’ll be well taken care of will also help you enjoy the present by not having to worry about the future.
Don’t buy on impulse
Controlling your behavior is a part of controlling your finances. Therefore, don’t buy things on the spur of the moment. Of course, it can be hard sometimes, and there’s nothing wrong in buying something you really like if you know it’s your only chance of getting it – like when you’re on vacation in a foreign country, for example. However, buying on impulse too often could mess up your financial planning. So, take care of the things you need before spending money on the things you want.
Moreover, you should also change your own spending habits. For example, instead of buying a cup of coffee before work, make your own coffee at home. Similarly, instead of buying lunch at work, bring it from home. Home-made food and beverages are not just healthier and cheaper but also tastier since you’re the only one who can prepare your own meals and drinks exactly the way you like them.
If you put some effort into organizing your budget and not spending money on things you don’t need, becoming your own financial expert could be easier than you might think. So, assess your current financial situation, and determine your short-term and long-term goals. Make a financial plan, and make sure to stick to it. This way, you will put your finances under control in no time.■