Did you know that only 49% of Canadians reported having a budget in 2019? Given how effective these crucial plans are at helping us manage our day-to-day finances, this statistic is pretty surprising. After all, without a budget in place, it can be hard to know when you’re making sound financial decisions.
If you’re like many people, you may not always feel confident in your money management skills—with or without a budget. Worse, when we don’t have the financial guidance we need, it’s much harder to meet our goals.
That’s where the right financial insights come in! If you’re hoping to bridge any gaps in your financial literacy, here are the best money tips every adult should know.
Set Financial Goals
It’s hard to figure out what you want out of your money if you’re not sure where you’re headed. Establishing financial goals can be a great way for you to focus on the changes that will help you shape your future as desired.
Before you do anything else, sit down and create some short- and long-term financial goals. Are you hoping to tackle your current debts, or do you need to save to buy a house? Are you expecting to finance your wedding sometime in the next year, or is your next big savings goal about your distant retirement?
Once you have a better idea of your goals, prioritize which ones to focus on first. Often, this means starting with the goals that are coming up the soonest.
From there, outline a measurable plan. For example, how much do you want to pay toward your debt each month, and when is your self-appointed deadline for paying it off? If you’re creating an emergency fund, how much do you want to put into it each month?
Make a Budget
Once you have goals in place, a budget helps you manage your money in the short term. After all, you shouldn’t have to rely on instant loans to keep up with your month-to-month spending, and you should feel like you know where all of your money is going and coming from.
Figure Out Your Current Spending Habits
To start creating a budget, stop using cash for the time being. Debit or credit card statements are easier to read when you’re trying to track your current spending habits.
With a list of your spending from the past month or two, try to get a read on your income and expenses.
How many of the things you’re buying are wants versus needs? Are you spending in any unnecessary areas? What recurring bills do you need to save for?
Set Up Your Budget
When you’re ready to manage your spending in earnest, there are a few different types of budgets to consider using, each with pros and cons. Play around with different styles until you find the one that’s most intuitive to you. From there, categorize the types and amounts of monthly spending you expect to see, and make sure these expenses line up with your current income.
Stick to It
Budgeting isn’t a “set it and forget it” task! You’ll need to track your income and expenses every month, whether you’re doing it on a piece of paper, in a spreadsheet, or via financial software or an app. You’ll also need to tamp down on impulse purchases in favor of disciplined spending.
Save for Emergencies
When you need quick cash now, an instant loan shouldn’t be the first thing you reach for. Instead, you’ll ideally have a bundle of emergency cash to draw from.
Experts suggest that you keep around three to six months’ worth of savings in an emergency fund. If you don’t have this amount saved yet, consider making building this fund one of your early financial goals. Make a habit of saving up for your emergency fund via regular monthly payments.
Build Your Credit History
Your credit history is crucial for everything from rentals to future employment.
To build yours, make sure you’re paying your credit card bills on time. Check your statements on a regular basis, and dispute any charges that look incorrect. However, be sure to use your credit cards with care: using them wrong by racking up fees can hurt more than it helps.
If you have any outstanding debts, like an instant online loan, make sure to pay these back on schedule as well.
In addition, make sure to check your credit report and credit score on a regular basis. This will mean getting reports from the major credit reporting bureaus, Equifax and TransUnion, to make sure their financial records about you are accurate.
Though investing may not seem like something you need to prioritize while you’re trying to get your money in order, it’s hard to overstate its importance. Investing can help you generate passive income while you’re saving for long-term goals like buying a house or retirement. Even better, you’re never too young or old to get started.
There are countless strategies for investing, and each will depend on your current situation and your future goals. Consider meeting with a financial advisor for help if needed.
Use This Financial Guidance to Manage Your Money
Making informed financial decisions can help you feel much more confident about the way you manage your money, as well as your preparedness for the future. Though there’s no harm in taking out online loans fast when you need them, budgeting well and having basic safety nets in place can be a smart first move.
For those who manage their money responsibly, taking out an instant loan can be a great way to bridge any gaps in a simple budget. Whether or not you’re following the financial guidance above, we’re here to ensure that you have cash when you need it most. Apply for a loan here.