This year, something about this year. I certainly have surprised you huh? No half-and-half drafts, no excuses for the gazillionth time, and I have shared life gems twice already in the new year: I am definitely on a roll. I wonder if this has anything to do with finally learning some practicality around consistency. A part of me also wonders if this is just a fluke because I have had some free time. But it's always nice to have something to wonder about. I guess that's why I want to write a book. You can 'I wonder' yourself from the beginning to the end when you are writing a book. Anywho I hope you have started February with a bang? I really have if I have something to say about it.
Today I have brought some financial gems your way because I never gatekeep all the good things. But first some update about my mini project; my reading nook is coming along well and would probably be in the finishing stage if not for my very minor OCD and the need to feng shui everything. I still haven't found the perfect chair yet but I got the brightest idea last weekend when I browsed the furniture section of 'At Home'. So fingers crossed I don't change my mind again, I secured a small bookshelf, got two new books, and picked up some artwork and a beautiful vase for my flowers so things are shaping up nicely. I will as usual keep you updated and share some pictures as soon as I can. Back to chartering the course for today, I understood the core of financial literacy years ago but I never applied it until a few years ago. It isn’t about being rich, I mean that's not a terrible thing at all but it’s about having control over your finances so you can live life on your terms. Today I decided to share some of the things I have learned along the way in high hopes of securing the bag or however they say it.
Every year I am poised to take on the stance that financial literacy isn’t just a skill: it’s a necessity. Imagine a life where you’re not stressed about unexpected expenses, where your money works for you, and where financial freedom isn’t just a dream, it’s your reality. That’s the power of financial literacy. It’s not just about budgets and spreadsheets; it’s about making informed choices that shape your lifestyle and future. Here's why, I believe that with the right mindset and strategies, anyone can take control of their money instead of letting it control them. You are totally responsible to refine your financial habits or go with the flow. I can go on and make a shabby list of ways to save and cut back on unnecessary expenses, it will most probably highlight things like: buying essentials in bulk, sticking to a budget, cooking meals at home, thrift and paying off your debt on time, etc. but if you are like me who has tried everything and anything but couldn't stick to it then this will be a waste of your precious time. So why take the generic route you have heard a gazillion times, I will plug you instead into just five solid gems that will make you build wealth over time.
The Power of Budgeting (Your Financial GPS) -Budgeting is like having a GPS for your money, it tells you where your dollars, pounds, naira, yen, etc should go and keeps you from getting lost in unnecessary expenses. You start by tracking your income and expenses, then allocate funds to essentials like housing, food, savings, and entertainment, and if you are like me and never stay in the same place for too long because of my fernweh nature then budget some money for travels. This way you can track how much goes where and can even automate these payments if you like. The 50/30/20 rule is a simple yet effective guideline: 50% for needs (rent, utilities, groceries), 30% for wants (entertainment, dining out, shopping), and, 20% for savings and investments. With a budget in place, you’ll feel empowered instead of anxious when making financial decisions. Not everything in life is foolproof so I understand if you over or under-estimate sometimes but try to get on track as soon as possible if this happens.
High Yield Saving vs. Investing (Know the Difference) - Saving builds financial security, investing builds wealth. A solid financial plan incorporates both. Start by saving at least three to six months’ worth of expenses in an emergency fund. Switch from a regular savings account to a high yield savings account. HYSA has better interest rates than a regular savings account. Some HYSA has 5.1% interest, which means the bank pays you to keep your money there. Look into investment opportunities such as stocks, bonds, and real estate to grow your money over time. All this went over my head the first time I had this conversation with a close friend. She had painstakingly explained some investing options one night I had called her in frustration but it was hard to grasp. I started reading more articles and watching videos about stocks and bonds and today I am paying my knowledge forward to people who like me struggled at first. Learning is the one thing I never shy away from so I encourage you to consume as much information before you start investing.
Financial Mindset: (The Game-Changer) - Your mindset plays a crucial role in your financial success. I must have heard this a thousand times if I bothered to count and like you are probably thinking right now, I thought it was just a hoax. A scarcity mindset leads to fear-based decisions, while an abundance mindset fosters growth and opportunity. In practicality, every month I worry about money, my blood pressure spikes, and I do struggle but when I don't worry as much and do what I have got to do with my finances properly, I barely notice when I get my next paycheck. Educate yourself, but most importantly set realistic financial goals. Also, surround yourself with financially savvy individuals who inspire you. I joke about this but my dear friend Kemi has shared so much credit information and it is such a joy to know these things.
Smart Spending: (The Art of Conscious Consumption) - Spending wisely doesn’t mean depriving yourself, it means prioritizing what truly matters. Before making a purchase, ask yourself if it aligns with your financial goals. One thing I have picked up is thrifting, I still might not be comfortable with thrifting clothes but there's a thrift story behind a few things in my cozy apartment. If you live in an upper-class community like me, you will be surprised to find the gems in these stores. I try to maximize every dollar I spend as often as I can. I am learning to cut back on impulse buying and saying NO to things I really don't need especially those thigh-high red boots I found on Asos last weekend. It is a struggle as you can tell but I always say it's best to live below your means.
Credit Scores: (The Key to Financial Opportunities) - This will relate more to you if you live in the Americas as I can't speak to the credit system of other countries. Your credit score is more than just a number at least I am learning this now. It is your ticket to better financial opportunities. A high score can lead to lower interest rates on loans and credit cards which gives you a bargaining chip if you ever want to make a big purchase. To maintain a good credit score, pay your bills on time, keep your credit utilization low, and avoid unnecessary debt. A different perspective I have learned is that not all debt is bad, but mismanaged debt can be a financial nightmare. Prioritize paying off high-interest debts like credit cards while maintaining good debt, such as mortgages or student loans, that contribute to long-term growth. The snowball or avalanche method can help you pay down debt efficiently. The Snowball method prioritizes paying off the smallest debt balance first, providing quick wins and motivation, while the Avalanche method focuses on paying off the debt with the highest interest rate first, which saves you more money in the long run, even if it takes longer to see progress
There is no tinfoil hat worthiness to financial literacy. You are either doing the right thing or not doing anything at all to build wealth. You build a secure foundation when you understand how to earn, save, invest, and spend wisely. Without it, debt traps become a reality, and you miss out on wealth-building opportunities. My legs might hurt from jumping to conclusions but If you haven't taken anything solid from today's post please remember to cook your meals at home because I promise there is always rice at home.
Your Financial Guru
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