Dear Entrepreneur, Here Are 13 Of The Most Powerful Financial Moves You Should Know

By Getrude Mathayo / Published July 29, 2022 | 1:10 pm

KEY POINTS

If you are struggling to handle your finances, then you likely need to create a budget, a plan for how to spend your money each month, based on how much you typically earn and spend. A budget is your best tool to change your financial future.

KEY TAKEAWAYS

Most people need some way of seeing where their money is going each month. A budget can help you feel more in control of your finances and make it easier to save money for your goals.

Whether you’re stuck in a cycle of debt, earning too little to maintain your desired standard of living, or simply wanting to get a jump on saving for a major financial goal, such as buying a home or investing, you may need help to get on track with your objectives

Financial freedom, having enough savings, investments, and cash on hand to afford the lifestyle you want for yourself and your family, is an important goal for many people. It also means growing a nest egg that will allow you to retire or pursue any career you want, without being driven by the need to earn a certain amount each year.

Automate your investments

When you’re saving and investing for the future, one of the best strategies is to automate your investments. With automated investments, a portion of your income is funneled away to your investment account for you, without you having to think about it

Learn about taxes

Unemployment benefits are considered taxable income. If you haven’t set money aside, try to start. Whether you file on your own or use a tax professional, you need to know what your filing obligations might be and how your choices can affect your bottom line when it comes to money.

Do your taxes

Figuring out how all the lines of the tax code interact is the best way to master the tax code. Once you know this you can feel confident in outsourcing to a pro if necessary. To reduce the hit to your wallet from penalties, be sure to file your return even if you’re going to owe and you can’t pay up.

Make a budget

Most people need some way of seeing where their money is going each month. A budget can help you feel more in control of your finances and make it easier to save money for your goals.

Use credit cards

Insure for disaster

You can protect your finances by having the right amount of insurance. Common types of insurance include car insurance, renter’s or homeowner’s insurance, life insurance, and health insurance. While you may be tempted to skimp on insurance, remember that it protects you from catastrophes that can send your finances spiraling.

Invest only in stocks

Stocks can be a valuable part of your investment portfolio. Owning stocks in different companies can help you build your savings, protect your money from inflation and taxes, and maximize income from your investments

Reduce Monthly Bills

One of the easiest things you can do to take control of your finances is to cut your monthly expenses. While you may not be able to reduce certain fixed expenses, such as rent or a car payment, without drastically altering your lifestyle, you can reduce variable expenses, such as clothing or entertainment, by being flexible and thinking frugally.

Build up your emergency fund

Having some extra funds available for emergencies is an essential component of your overall financial well-being, with enough cash to cover three to six months of expenses being a common recommendation. For many people, though, that can add up to an intimidating number and can discourage even the best-intentioned saver.

Save up for inevitable expenses

If you are out of debt, work on increasing your savings. How much you should save depends on how old you are when you start. The earlier you start to save, the better for your wallet, both now and in retirement.

Stay away from debt

One of the most expensive mistakes that you can make is to carry a lot of debt, especially high-interest credit card debt. If you want to change your financial picture and gain more financial opportunities, pay off your debt as quickly as possible

Keep on learning

Ensure that you have the skills you need to stay competitive in the workplace. This may mean taking extra certifications or getting training through your current employer, or heading back to college for a graduate degree that qualifies you for a more stable profession.

Find Additional Sources of Income

Financial issues sometimes stem from insufficient income as opposed to spending issues. If you are sticking to a budget, not spending money on things you don’t need, and still have challenges making ends meet, you may want to look for a higher-paying job or generate more than one source of income.