Empowering Yourself with These Essential Money Tips

essential money skills

Knowledge remains a great source of power.

Even in your financial decisions, you show how powerful you are when you put the right financial knowledge to work. 

With the help of Fintech companies like Swissmoney, it has become so easy for anyone to gain access to their funds without going through the stress that the traditional banking system is known for. 

One of the downsides of the help of financial technology is how it makes it easy for people to make impulsive financial decisions since they can lay their hands on their money easily. 

However, we should never let the ease of access to our financial resources make us victims of illogical financial decisions.

Hence, this piece will show you some essential money tips you’ll need to handle your finances better. 

Basic Knowledge About Money 

Contrary to the popular notion of money that it is meant to be spent, money can be said to be a skill.

There are money managment skills you must acquire as an individual before you start making money. 

In financial literacy, this skill is referred to as personal finance.

When you have strong and positive personal finance knowledge, you easily escape what the great financial expert Robert Kiyosaki called the rat race. 

The knowledge of money below will help you avoid the struggle that most people face with money. 

Money is meant to be Budgeted

Budgeting is the fluid you need to grease the unstoppable flow and sustenance of money into your account.

While you may be motivated to want to spend your income all because more will come, you must be disciplined enough to budget your spending. 

You must draw your budget table at the beginning of each month, listing your expenses and comparing them with your income. 

Budgeting helps you stay away from spending above your income.

You can categorize the most important from the least important.

With a standard budgeting strategy, you will find it easy to run your savings account. 

Follow the Evergreen Classon’s Rule

If you are a motivated financial knowledge seeker, you must have heard of the financial guru George Classon.

He authored the famous book, The Richest Man in Babylon. 

Classon, in his book, gave an evergreen rule that everyone needs, which is Pay Yourself First. 

It is not uncommon to find people who are working only for the paycheck.

All they want to do is ensure they pay their bills and use the rest on themselves, perhaps go on a vacation in the Maldives. 

As a result, we have more spenders but less savers.

A very crucial knowledge you need about money is that at least one-tenth of whatever you earn should be used to pay yourself first.

You can do this by putting it in your savings account, your emergency fund, or in an investment.

Until you’ve not paid yourself, do not bother about other bills. 

Thanks to the influence of technology on finance, you can easily automate your savings. 

Understand your banking options

Although banks exist to serve your financial needs, not all banks have the right service or offer for you.

You need to understand the different options of banks and financial service providers out there to choose the right one for you. 

There are various financial service providers you can work with to put your money in the right place, including commercial banks, credit unions, fintech, investment banks, etc.

All of these institutions have their pros and cons.

They have distinct account offers that will benefit you as an individual financially and as a business owner. 

Common account types that you also need to be aware of include savings accounts, money market accounts, checking accounts, individual retirement accounts, etc. 

When you learn about the various banking options you have, you can keep your money safe for specific purposes and also enjoy high-interest rates. 

Understand How Credit Score Works

The right money skills include your ability to stay away from a debt you cannot repay.

And a very good way to start is to understand how your credit score works. 

Credit score reveals an individual debt’s (credit) history to financial service providers.

So, with your credit score, a credit company will know your creditworthiness. 

If your credit score is too low, it affects how credit companies will offer their service to you.

This may come in the form of higher interest rates or a high down payment. 

It may increase the interest you pay on other purchases, such as your mortgage or car. 

So, you need to understand how you can maintain your credit score and protect yourself from identity theft. 

Ways to build a strong and healthy credit score include paying your credit on time, requesting higher credit limits, reducing the rate at which you apply for new accounts, etc. 

Be Prepared for Emergency

An important money tip for anyone is to have a specific amount that will cater for an emergency event.

Unexpected expenses may come in the form of sickness, accident, lawsuit, job loss, etc. 

You must have an emergency account against the eventuality of an unplanned event.

You can strategically fill up your emergency fund monthly.

An emergency account shields you from incurring a high-rate credit or loan.

A very good estimate of a worthy emergency fund is an amount that can cover your basic needs for at least 6 months. 

An excellent hack is to ensure you set up a high-interest-rate savings account for this purpose.

So, as you consistently save into the account, you also enjoy the benefit of compound interest. 

Conclusion On Essential Money Tips

Financial literacy helps you maintain your finance.

You can achieve your financial dreams with your earnings.

Not having the right money knowledge will deprive you of access to every good thing you want. 

With the help of technology, it is so easy to automate your financial decisions.

Ensure you embrace budgeting as your go-to means of spending your income. 

Create an emergency fund account that will cater to any unforeseen circumstances you may be faced with.

And never forget to pay yourself first.