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8 Ways To Make Smarter Financial Decisions

If you want to become the master of your own finances, you need to make sure you’re making smart financial decisions more often than not. Sometimes this mean taking a risk or two to get to where you want to be – it definitely doesn’t mean hoarding all of your money in a savings account.

If you’re not sure where to start with your finances, this guide will give you 8 ways you can begin making smarter decisions. Read on to learn more:

Come Up With Plans And Goals For The Future

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If you start trying to make smart financial decisions with a plan and goal for the future, you’ll likely make some mistakes. Knowing where you want to be in the future and what you want to be doing will be a good motivator for spending money wisely and using it in a way that supports your future vision.

Ask yourself the following questions so that you can figure it all out:

  • How much money do I need to become financially free? – it’s often a lot less than you think.
  • Where do you want to be living?
  • How do you want to be earning money?
  • Who do you want to be working with?
  • What sort of lifestyle do you want to lead?

Build a clear picture in your head of who and where you want to be so you can come up with a suitable plan and some goals. Write it down and leave it somewhere you can look at it each day to keep it fresh in your mind. Many people who become wealthy swear by this technique! All you have to do is keep on affirming what it is you plan to do and you should naturally come up with ideas that will help you to get there. Many experts agree that if you can imagine yourself doing something, then your brain gets on board and agrees that it must be possible.

Know All Of Your Numbers And Track Your Expenses

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You don’t need to painstakingly budget, but you should have a good idea of your numbers and expenses so you can make better decisions. How much do you have coming in? How much do you tend to spend? If you haven’t been tracking your purchases, now is the time to start. You could use an app or do it in your notes. This will give you a better idea of where you can potentially cut back. Maybe you spend a lot of money on eating out, for example.

Learn As Much About Money And Handling Finances As You Can

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Your goal should be to learn as much about money and handling finances as you can. You want to get really comfortable with money, and accept that you want it. Many people can’t even accept that they want to make more money because they believe it’s greedy, that rich people aren’t very nice, and other limiting beliefs that can stop them from getting to where they really want to be. You can read books, watch youtube tutorials, and if you’re serious you can even look at taking an Online MBA in Finance from Redlands. Whatever you do, make it your goal to completely change your mindset around money, becoming as comfortable with it and thinking of it as positively as you can.

Aim To Reduce Your Living Costs As Much As Possible

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There are likely ways you can work on reducing your living costs, which will free up more of your budget to go towards investments and other important things. For example, can you swap utility suppliers? If you haven’t done this in a year or more, chances are there’s a better deal out there. Below we have some more suggestions:

  • Switch to a cheaper phone package, or contract only package.
  • Shop at cheaper supermarkets and avoid buying brand names.
  • Become more eco friendly, reusing and recycling various items. For example, could you upcycle an old chair rather than buy brand new?
  • Always go shopping with a list, and stick to it.
  • Never go shopping hungry.
  • Create a capsule wardrobe and stop buying so much new clothing – not only do you end up neglecting half of it, it’s terrible for the environment.
  • Reduce consumable habits like drinking and smoking.
  • Get a more cost effective vehicle or cycle/walk more.
  • Shop in thrift stores.
  • Prep food and take your own lunch to work.
  • Make gifts for people.
  • See if you can make your beauty/grooming routine more low maintenance.
  • Always look for vouchers/coupons.
  • Look after your health early on to avoid medical bills.

The above is just an idea of what you can do to reduce expenses. You don’t have to live with less excitement or anything like that; think of it as a fun challenge.

Commit To Investing In Yourself

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When you’ve freed up some cash, one of the best things you can decide to do is invest in yourself. Investing in yourself is never a waste of time and money. What courses, seminars, and workshops can you look at doing that will help you to improve your skills and talents? This way you can become a more desirable employee, or come up with ideas to start a venture of your own.

Don’t Give In To Impulse Purchases

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Sleep on impulse purchases; not just for one night, but for a while. Chances are, you’ll feel better for really thinking about the purchase, say, for a few weeks. If you still want to buy it, you know that it wasn’t just a novelty buy!

Start An Investment Portfolio

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Saving your money is not the be all and end all. Setting some money aside for your investment portfolio will protect you in the long run. It can be tough to get started, but apps like moneybox can help.

Spend More Time Around People Who Are Financially Smart

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We are the average of the 5 people we spend the most time with. If you’re spending time with people who spend frivolously for short term enjoyment, you’re likely going to do the same. Spend more time with those who make good decisions and you’ll be more likely to do the same!

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