HOW TO BE FINANCIALLY FEARLESS

BY :EMILY LEIGHTY

Starting out on my own after college, I was at first overwhelmed by my seemingly never-ending expenses and meager fresh-out-of-college salary. Over time, however, I found that I could make it by  the little money I had if I was careful – and I even had enough money left over to have fun with my friends when I wanted to. Like me, I’m sure you can take steps toward becoming financially fearless by keeping a few things in mind.

BUDGET

Before you can get a realistic view of where you are financially, you have to be able to compare your money-in versus your money-out. A budget is the perfect way to monitor your personal cash-flow. Your budget can be as detailed or vague as you want it to be. Track your bills in categories as broad as “utilities” or as specific as “water” and “electricity.” It’s a good idea to budget your spending money, too! If you plan to see a movie every weekend, for example, don’t forget to include that on your budget.

SAVE

After you have created your budget, you will be able to determine how much extra money you have that can be saved each month. Savings are important for unplanned expenses and emergencies and for securing your future finances. Maybe you want to use some of your savings for investment. Another portion could be designated to your retirement savings.

USE CREDIT CARDS WISELY

Credit cards can be incredibly useful, but they can also be infinitely dangerous! Don’t get into the habit of spending more than you can pay for. Pay off statements in full as often as you can to avoid accumulating interest (and debt!) while also reaping the benefits of a credit card, like accumulating points or improving your credit score.

SET A GOAL

What are your financial goals? Do you want to buy a house or a car? Do you want to splurge on an exotic vacation? Do you want to pay off a loan? Set short-term and long-term goals so that you can remember why you’ve set up a budget to keep yourself on the right path. Keep monthly track of your progress so that you can stay excited about reaching your goals.

BE DISCIPLINED

After you have created your budget and set some goals, stick to your plan! Know how much spending money you have each month and work hard not to exceed your limits. A method that works for me is to give myself a spending allowance in cash every month; when I use cash, I can see how quickly I am spending my money (unlike a debit card, which lets me spend mindlessly).

Getting your finances organized can be overwhelming at first, but if you are dedicated it becomes easier. There are also resources available to help you streamline the process. Try online tools like Mint or Budget Pulse to get started. Many banks will also provide personal finance resources to customers. Remember, when you equip yourself with the right strategies you can take all of the uncertainty out of your finances, keep more cash in your wallet, and become financially fearless.

FINANCIAL WISDOM FROM WARREN BUFFETT:

         ON EARNINGS: “NEVER DEPEND ON A SINGLE INCOME. MAKE INVESTMENTS TO CREATE A SECOND SOURCE.”

         ON SPENDING: “IF YOU BUY THINGS YOU DON’T NEED, SOON YOU WILL HAVE TO SELL THINGS YOU NEED.”

         ON SAVINGS: “DO NOT SAVE WHAT IS LEFT AFTER SPENDING, BUT SPEND WHAT IS LEFT AFTER SAVING.”

         ON INVESTMENTS: “DON’T PUT ALL YOUR EGGS IN ONE BASKET.”

         ON TAKING RISK: “NEVER TEST THE DEPTH OF A RIVER WITH BOTH FEET.”

                                           EMILY : written from Virginia International University, USA.