What’s in your financial future? A new car?…
Your money… it’s part of your everyday life, but how well do you know it? Chances are, you already know some things about your money. But there’s always more you can learn. By mastering your money, you can make it work better for you to help reach your financial goals.
Money is a big subject and learning how to master it can seem overwhelming. To make things easier, let’s break it into four steps: spending, saving, borrowing and protecting. Follow these steps to build your money mastery.
use your budget
Congrats! You finished your budget – now what?
You can use your budget as a tool to manage your spending and work toward financial goals.
You can compare your budget to your actual spending each month and make adjustments if they’re out of line. You can even set aside a weekly amount for those little extras that come up – and stick to your limit.1
Planning for holidays or special occasions? Use your budget to decide how much money you can set aside or save, so you can enjoy them without worries.1
Check your balances before you go shopping and set a spending limit that won’t break your budget. 1
Now that we’ve given you some ideas, let’s talk about the HOW of setting a savings goal. The SMART goal method is a popular one you can use to set financial goals. The letters in SMART stand for Specific, Measurable, Achievable, Relevant, Time Bound.2
By making your goals SMART you’ll find it’s easier to follow through and reach them. As you plan, ask yourself, is it:
Specific: What am I saving for?
Measurable: How much do I need to save?
Achievable: Can I reach this goal?
Relevant: Why is this goal important? Is now the right time to do it?
Time bound: When will the goal be complete?
The best thing about saving money is that you can see the results of your hard work as you watch it grow. Plus you’ve taken another step in mastering your money!
growing a healthy credit score
Making payments on time, every time is the best way to grow a healthy credit score. This is where your budget from Step 1 can help. It will remind you to set aside money each week or month to pay off debts. Setting up automatic payments or electronic reminders are other ways to avoid missed payments. 5
Also, keep an eye on the credit limits for your accounts. Staying too close to the limit can affect your score. Try to keep your balance low in proportion to your total credit limit.
This all takes time, so be patient and stick with it. Your credit scores are based on your history, and improve the longer you have credit accounts open, make purchases, and pay back on time.
You did it!
By taking these 4 steps to master your money, you’ll be able to make better decisions on how to spend, save, borrow and protect it.
If you want to learn more about mastering your money, here are some helpful links.