Saving money like a pro, and the importance of mastering the idea as early in life as we can, cannot be overstated. Except if you are blessed to be independently wealthy, chances are, like most people, you have limited resources. What you choose to do with those resources and the life choices you make however is what sets you apart. In other words, you’ll have to be self-trained to manage your money like a pro.
There are many tips and tricks that can help you not only stretch, but also grow your finances and get the most out of what you’ve got coming in.
I have found that boosting your financial life with self-implemented ideas and strategies can be particularly rewarding. It’s just part of our intrinsic nature as humans to appreciate more what we earn, rather then what is handed to us. Being self-made would surely be the dream.
With proper financial planning, and a few tweaks here and there, you can all but eradicate your worry because you’ll feel more comfortable about being on the right path financially. I invite you to stick with me and keep reading to see if any of the tips below is something you can begin to apply in your unique situation today.
Challenges you might be facing IN saving money like a pro
First, let’s discuss some of modern day challenges from a financial standpoint. Are you wondering why you seem to get skint in the snap of a finger? There always just seems to be way more month that there is money. Trust me, I can relate.
Below here is a list (though not all-inclusive) of common reasons or challenges that you might be facing, which are directly or indirectly related to your financial struggle. To money like a pro, identifying the root cause of a problem oftentimes proves to be half the battle in solving it.
Let’s pin-point if any one or more of these below are responsible for what you may refer to as your current financial stressors, which in turn, might help you solve them.
Education and student loan debt
This one is a no-brainer and typically the biggest elephant in any given room. One of the biggest causes of the current financial crisis might be the expensive fees of universities and colleges, with no apparent end in sight to the rising fee structure.
According to a 2019 report from the center of budget and policy priorities, from 2008 to 2018, the cost of four-year colleges and universities increased in all 50 states. On average, tuition increased by 37%, and net costs (once you factor in scholarships and grants, increased by 24%. Yikes!)
In order to cope with them, most families and would-be college students opt for education loans which, if not properly managed, could be the difference between living a stress free life and drowning in a seemingly endless sea of debt.
Financial Know-how (or lack thereof)
Most of us simply do not possess the proper knowledge and awareness when it comes to managing our money. This lack of knowledge unfortunately paves the way for financial instability as we lack the skills and general know-how to react accordingly when life’s financial stresses hit.
Managing your money like a pro, just like anything in life takes skill, patience, and at the very least, some acumen.
Low Income Levels
Many jobs today simply do not cut it when it comes to paying graduates and/or skilled workers their deserved due. If your source of income is below par, it makes it almost impossible to keep up with life’s expensive financial demands that come with living in this age.
The Prodigal Effect
Prodigality is just being silly with the resources we do have. Spending already meagre resources on the mundane could be a major factor in not only making you penniless, but also keeping you impoverished for that matter.
The prodigal effect is a direct enemy of saving money like a pro.
Below are a few cues you can begin to implement today to begin to walk back and erase the negative effect any one or more of the above factors is having on your finances today.
Tips and Tricks to improve your finances
If you are looking for possible solutions to your less than stellar finances, coupled with getting expert advice, there are a number of tips and tricks that should begin to help you steer that rudder in the right direction. These tips and tricks are given below:
Financial Management and Planning
You truly cannot expect to prevent a personal financial crisis, or climb out of one for that matter, without properly planning and managing your finances. Make a schedule, build a budget, take note of your expenses and leave nothing to chance. I find spreadsheets work great to keep me on task.
Taking note of your expenses on the first of every month, or on a schedule coinciding with the timing of your income, may be the key to shedding light on your previous (un-budgeted or ancillary expenses).
You should be aware of where your money is going. Whatever gets inspected, gets respected. I don’t know whose quote that is, but I’m totally claiming it. You should too, cheesy as it sounds, and begin to practice it.
Learn to Give
Wait! What? I know. This is supposed to be an article about how to grow your income and saving money like a pro. Surprising as it may sound, talking about giving in this discuss is no mistake. This bullet point belongs exactly right in here along with the other tips I am putting forward.
Some of the wealthiest people in the world, including Bill & Melinda Gates, Warren Buffet, and Oprah Winfrey have credited giving for playing a major part in the growth of their net worth. When you learn to give, you are stepping out of yourself, and putting others first. It is one of the many lessons we all should learn as early as we can.
This article may have been written with a younger audience in mind, but this particular point speaks to everyone reading this regardless of whether you are a baby boomer or a millennial. Give. Buy something nice for a friend or family member. Spend some time with someone hurting. Volunteer at the local shelter. It is more blessed to give than to receive, with the keyword being blessed. You’ll find you’ll go way farther with 90% than you would with a 100% – just for the sheer joy giving away that 10% to your favorite charity, or cause, or local church, brings to your heart.
Try it for a while and let me know in the comments below in what ways giving changed you, and/or your perspective on money and life in general.
If the current economic situation teaches us anything, it is that saving money like a pro, especially to withstand such crucial times, is of high significance. If you do not learn early the art of saving, it could become more than just a handicap down the line. For instance, an emergency fund can be established in order to cope with emergency situations and unexpected events in life.
This piece of advice holds high significance especially for millennials as you are beginning to build habits that would form the bedrock of who you are for decades to come. So many financial institutions are making it easy today to open an account and begin to put something away for the rainy day. Sign up for automatic transfer which moves money (on auto-pilot) from your spending bucket (aka checking account) to your savings account (aka “Savings Account”).
The sooner your money is moved into a savings account, the likelihood of you spending it on an arbitrary item is greatly reduced.
Apart from savings, it is a great idea to begin to dip your toes into some investing. Nothing on a grand-scale for starters. There are so many online or robo-advisor companies today where you can begin your micro-investing journey. My favorite and most recommended on this blog are Betterment and Wealthfront.
Robo-Advisors cut out the stress of scheduling, driving out to, and meeting with a suited up financial investor. Right on your computer, you get asked a series of typically non-invasive questions, and within minutes, you’ve got your account set up. You do have to select your risk tolerance which could normally range somewhere between “super conservative” to “whoa, Hey now!”
Investing with any one of these companies not only creates sort of a backup for you to help you in unforeseen situations, but also gradually begins to open you up to the world of investing possibilities out there. You learn a ton of lessons along the way, which only lead to better and more savvy investment decisions on your part. I personally hold accounts at both Betterment and Wealthfront and have nothing but good things to say about them.
Other companies in the investment category worth a look at are Acorns and Stash. The earlier you invest, the better your savings for the future will be. It is not necessary go all in. With Stash for instance, you can begin with as little as $5. Now that’s my kind of early investing company. As it is often said:
it is the little things that make a big difference
Special attention should be paid towards your expenses. One should establish a proper plan to calculate expenses in accordance with the flow of income. In essence, account for your expense money like a pro. It raises personal awareness of where and how you can spend your money.
Get practical and downright wilful about your expenses. For instance, you can choose to categorize your expenses using spreadsheets, or go straight cash, and place the allotted amounts for monthly expenses in clearly marked envelopes. You can enlist the expenses such as Food, Clothing, Bills, along with their expected budget and be a stickler about adhering to posted budget amounts.
The Cash envelope system (loved by Dave Ramsey, FYI) is one of the best ways to stay within your budget on a monthly basis. It greatly assists you in calculating how much you can spend because invariably, once the envelope is depleted, you do not allow yourself to spend any more on that particular category for the rest of the month.
Educating yourself and raising awareness
Just like with any are in life, you’ve got to feed your financial awareness. You should constantly educate and re-educate yourself regarding the subjects of finances, management, and budgeting. There are so many free (and paid) courses available online today that you can take at your convenience to continue to hone your skills on the topic of money and finance.
We haven’t even begun to talk about the books available on the same topic. If you possesses the proper knowledge, chance are you can expertly take care of your expenses and manage your own finances. Furthermore, developing your learning in the field of finance means your personal global economy has a great overall chance of improving.
Get a side-hustle. You could also search for jobs online that you can do in your free or leisure time. This can cause a seismic shift in the current state of your finances. It is of great importance and proves to be a marvelous idea for students and middle-aged individuals alike, because the internet today is flooded with gigs when it comes to landing an online job.
Examples of side-hustles you can look at as soon as today include article writing, transcription, taking online surveys and of course blogging. See our full article on working from home as it goes in-depth with detail on some of these side-hustle ideas. These are some of the best ideas to implement immediately when it comes easing even some of the worst financial stresses as any one of them, sometimes instantaneously, creates another source of income for you.
Create a financial Calendar and Calculate your net worth
Create a financial calendar to help you stay up to date with account balances, income, as well as loans, bills and taxes coming due. My favorite tool to use is Personal Capital. It takes away the guess work and lets you know at any given point where you stand in income and investments, in relation to your debt.
This will help you stay focused in keeping your expenditure down, driving up your income, and working toward finally alleviating your financial burden, or better yet, becoming truly free financially.
In conclusion, make a plan and be true to it. Adopt any one or more of these simple yet effective tips and tricks to improve your finances and set you on the path to being the boss of your money. Do let me know if you’ve tried any one of these in the past, or are working on something similar right now, and how well it’s going. What would you keep, change or improve?