4 Beginner Friendly Tips to Improve Your Finances in 2022

We all have dreams of improving our finances but sometimes we’re not sure where exactly to start. This year, I am making an intentional effort to sort out my finances. Here are 4 things that i plan on doing this year that you should consider doing too.

1. Budget: According to Investopedia, “a budget is an estimation of revenue and expenses over a period of time.” Most people create monthly budgets to account for their income and expenses. In a budget, you carefully lay out how much money you intend to spend on certain things such as rent, bills, groceries etc. and ensure that your income can cover all of your expenses. I have been learning that as an adult, its important to have a budget. If you have a particular financial goal, you’ll struggle to reach that goal if you’re not ensuring that you create a budget and stay within the budget. I’ll be honest. While I do have a budget, there are moments when I do go over my budget on certain things. I’m learning that once I create the budget, it now becomes my duty to ensure that I stay within my budget. By having a budget, I have a tool to hold me accountable to my goals.
2. Track Expenses: An expense tracker is a financial tool used to keep record of all of your expenses. Some time last year, I realized that I had come to a point where i knew where my money was coming from but not where it was going. Then I began to take note of where all my money was going. Spent $10 on food? Write it down. Spent $15 on a new book? Write it down. By keeping track of your money, you’re able to assess where the majority of your money is going and then make necessary changes to improve your spending. You can download my free expense tracker from my resources page here. Alternatively, you can simply open the notes app in your phone and create a note for your Expense Tracker each month and every time you make a purchase add to the notes what you spent money on and how much the item cost.
3. Emergency Fund: This year, I am making an effort to create an emergency fund and consistently add money to it each month. Bankrate defines an emergency fund as money that’s set aside for unplanned expenses. The pandemic has taught us that it is imperative to save for a rainy day. With an emergency fund you can add money to an account consistently to assist when a financial crisis unexpectedly occurs such as loss of a job. The key to remember here is YOU DO NOT TOUCH IT UNLESS YOU ABSOLUTELY HAVE TO.
   
4. Invest: This is a broad area that you can consider. Since we’re talking about money, the first thing that may pop in your mind is investing in stocks. If you intend to invest in stocks, its important for you to do your research to assess how much money you need to make an initial investment, what level of risk are you willing to take and how often do you want to make investments. In The Bahamas, if you’re planning on investing, you would need to use a stock broker such as Royal Fidelity, Leno or CFAL. Each of these brokers offer different options such as opening a brokerage account, investing in a mutual fund or simply buying shares in a particular company. Each of these brokers have different minimum investment requirements. Choose the one that works for you.
   Another aspect of investing is investing in yourself, your gifts, your talents. Why not invest in a course or conference to help you improve yourself. By investing in yourself, this may open the door to you having a side hustle. Whichever investment you decide to make, stay in it for the long haul and in the end, you will receive a return on your investments.

I hope you found these tips useful on your journey to achieving your financial goals.

For more tips on budgeting, join me this Sunday January 30th at 5:00 pm on Instagram Live @scharsmind where I’ll be discussing all things budgeting with a special guest.

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