When you think of finance, it’s hard to not mentally picture Leonardo in The Wolf of Wall Street as opposed to bank accounts, investments, and personal budgets. (I mean, which is more fun to picture?) Even if your knowledge of finance is limited to what you’ve seen in movies, you can still jump-start your personal expenses with a little help from yours truly or a financial expert such as Dr. Lindsay Rosenwald, for example. And even if your financial dreams still involve stocks just like they did for Leo, you may want to think about receiving investment tips from somewhere like Stocktrades as they are known for being a reliable source of information on the latest stock market trends. For now though, here are the basics for having a handle on your finances.
Track your spending
You can’t keep track of your money if you don’t know where it’s going. Take the time to sit down and read through your last few bank statements. You’ll get a better sense of your spending trends as well as your good (and bad) habits. Not only will you understand how you handle money, but you can pinpoint areas where it’s easier to save instead of spend. Pay close attention to ATM withdrawal fees, excessive use of Uber, and too many online orders. (We’re all guilty on that last one.)
Understand your pay cheque
It’s one thing to know how much your annual salary is, but do you know how much you bring home each week after taxes, insurance, and other fees are taken out? If you’re having trouble understanding all of the calculations and your pay cheque, schedule time with your HR representative and have them walk you through it. While you’re visiting HR, you should also ask about…
Direct debit hacks
If you’ve ever had to personally deliver your pay cheque to the bank on a regular basis, you know that it’s a task that can easily be handled by direct debit – where your company deposits your pay cheque directly into your bank account (e.g: you can start spending as soon as it becomes pay day). Most companies that have direct debit will also allow you to deposit a certain percentage or amount from your pay cheque into a savings account. If you’re unsure, ask your HR rep to walk you through it. If you don’t ask, you’ll never know!
Save, save, save!
We mentioned savings accounts above, but you need to set aside funds for the future on a regular basis. Aside from your usual account, set up a savings account to contribute to on a regular basis. Just remember first to do your research so that you find the best bank to open savings account with. For example, online banking is a game-changing solution for a lot of people looking to save money, and there are plenty of different options on the market nowadays.
Furthermore, I was speaking to a friend of mine about my financial situation and she mentioned something like a tfsa (tax-free savings account). I had never heard about this before, so I thought I would check it out. If you are like me and thought this was a savings account, that is understandable from the name. But it does work in relation to helping you save money, but without tax and interest. For anyone who is looking to improve their financial situation, this is worth looking into. Plan to not touch this account unless you have an emergency (this is why your savings are sometimes referred to as a “rainy day fund.??)
Limit your card usage
While credit/debit cards are extremely convenient, they are also very risky. By treating our spending as magical transactions that occur through mid-air we become a lot less aware of how much we are actually spending. We are all guilty of that initial shock followed by the desperate denial when confronted with our monthly statement. To avoid this, try withdrawing a relatively healthy sum at the beginning of the month and use it for all your little expenditures. This way your bank account won’t be ransacked by daily 3 coffee breaks and you use up all your loose change too!
And finally, make a budget.
The golden rule for making a budget is to follow the 20-30-50 rule. 20% percent of your take-home income should be geared towards savings and paying off debts. The 30% is for flexible spending, also known as expenditures that change per month. This includes food, hobbies, entertainment, and going out money. 50% should go to “fixed costs,?? which include bills, monthly subscriptions, rent, and other usual expenses
The biggest rule about personal finance is that you should do what fits your lifestyle best. When you’re making your budget, stick to what allows you to live a comfortable lifestyle and prioritise what’s important to you. And who knows? You could find yourself on Wall Street in no time.
