We tend to worry about our finances on a regular basis. In some cases it may even be negatively affecting our sleep patterns. When it comes to financial planning, many of us don’t even know where to start. And yet planning is such a big part of our lives — whether we are planning a fun weekend getaway or prepping for a presentation for work.
The truth is, with the right approach, as well as the access to educational platforms, you can make small changes in your life and take control of your financial future.
Start By Getting Informed
Inform yourself about financial planning. Start following a blog that provides financial advice, or find a good book about financial planning to read at night before bed. Increasing awareness around your finances will drive powerful change. Keeping yourself informed will help you feel secure.
In addition, try to be aware of your spending habits. Divide your spending into necessary or luxury purchases, and start keeping track of how much you spend on certain things- for example, how much do you spend on coffee in a week? Being conscious of things like that empower you to make change, and will inspire you to start budgeting.
Create a Budget
These small steps should ultimately lead you to creating a personalized budget. Setting up a budget means understanding where you are right now, which will ultimately help you understand your future.
The most important rule of a budget is following your budget. Keeping track of your spending habits will force you to question your purchases, and will ultimately lead to smarter financial decisions. Try to start setting a little money aside every month, and think about different goals you would like to achieve.
Set Financial Goals
Generally, there are two types of financial goals: long term and short term. Short term deal with the necessities of today, or maybe a week from today, while long term goals can be bigger- like saving for a trip to Europe in a few years, or saving for graduate school.
One of your goals should be to pay off credit debt. In many cases the interest associated with credit card debt is so costly that it makes achieving your other financial goals more difficult. That is why you should start with credit card debt and make that a short term or long term goal, depending on your financial situation.
Create an Emergency Fund
Another financial goal should be to create an emergency fund. Without an emergency fund, an unexpected expense could send you further into debt, so you always want to be prepared. According to Investopedia, “to get started, $500 or $1000 is a good goal. Once you meet that goal, you’ll want to expand it so your emergency fund can cover larger financial difficulties, like unemployment.”
While you probably have other savings goals, too, knowing that you have money set aside for an emergency should be a top priority. Planning for an emergency creates stability, and that stability will ultimately lead to financial empowerment.
Invest a little
As intimidating as investing can be, starting off early, with as little as $5 a month, can help you achieve your financial goals. According to Money Under Thirty, “you can start by putting away just $10 per week. That may not seem like a lot, but over the course of a year it comes to over $500.”
If you’re a first time investor, consider using a platform which also has an educational component. Today there are so many great platforms that allow you to align your financial objectives with your values. A Forbes’ article states that impact investing might be one of the most influential and important social innovations in our lifetime.
Newday Impact Investing
At Newday, our mission is to spread the power of investing with your conscience. We’re working to offer a wide range of products to empower our clients to reflect their values in their financial activity. As we create more portfolios that connect to a broader range of ESG themes, we provide information and support to our clients who are looking to “Get Informed, Get Involved, and Get Invested”.