Keeping track of your money as an adult can feel like learning a second language. There are so many terms, strategies, and so much advice it can take a lot of work to know where to start. That’s why it’s helpful to have a guide when trying to sort through all the financial advice. This article covers fundamental principles that will help you manage your finances, regardless of your situation or income level. Christians tend to value generosity, humility, and service above getting rich, but they can still be wise when managing their resources and holdings. Christians who take care of their money will be more able to help others in need later.
Focus on the why not just the what.
Financial literacy begins with knowing your values, goals, and why you want what you want. It’s not enough to write down your income and expenses — it means understanding how those things align with your values and how you want to live your life. Money isn’t the enemy but a tool for living out our values and achieving our goals. For example, if you value generosity and want to be able to help others, you’ll want to make sure you have enough saved up so you can do just that. On the other hand, if you value being frugal and avoiding debt, you’ll want to make sure you spend within your means. Your values are the guiding principles that will guide you into making the right choices with your money.
So before you start managing your money, write down the values most important to you.
Keeping a written list of your values in front of you will help you think through your financial decisions as they come up and avoid making impulsive or unwise choices.
Be discerning with your resources.
This is a fancy saying, “don’t spend recklessly.” Money is a resource you can use to help meet your needs and achieve your goals, but if not handled correctly, it can be a source of stress and anxiety when you don’t know how to manage it wisely. That’s why it’s essential to be discerning when managing your finances, which starts with knowing your limits. Once you’ve identified your values, goals, and limitations, you can start making informed financial decisions. For example, if you’ve saved up enough to take a vacation but know you’ll struggle to make ends meet for a few months after, it might be better to save the vacation money for when you’ll be able to put it to better use. Being discerning with your resources will help you avoid getting caught in the trap of overspending and owing money you can’t pay back.
Track your spending and save regularly.
We’ve all heard the advice to spend less than you earn and to save what you can. But you might be wondering where to start and what to track. Many apps, websites, or services can help you track your spending and save money. You can also keep track of your spending with a pen and paper if you prefer. No matter what method you choose, the key to making sure you save regularly is keeping track of your spending as closely as possible. It’s also helpful to make a budget that includes your monthly expenses. If you’re saving for a specific goal, adding those funds to your budget may help you reach your savings goals more quickly. If you’re worried about feeling deprived, consider adding a 10% rule to your budget. Put away 10% of your income for savings before spending the rest.
But don’t put all your eggs in one basket.
It would be best if you diversified your income and your savings. Let’s start with income. If you earn a paycheck, you likely have less control over how much you earn each month than you might like. That’s why it’s essential to ensure you have other reliable sources of income. This could include working a side job, selling items you no longer need, or doing freelance work. Having multiple income sources will help ensure you have a reliable source of money each month. Now, let’s talk about diversifying your savings. Ideally, you’ll have accounts for each goal — with enough in each account to achieve that goal as soon as possible. This means you’ll have savings account for emergencies, a retirement account, and savings for each goal you’re working to achieve. There are different types of accounts for various purposes, so it’s essential to diversify your savings to prepare you for unexpected expenses.
Don’t be afraid to ask for help.
If you’re feeling overwhelmed or having trouble managing your money, don’t hesitate to ask for help. Your church, family, and friends can often provide support, advice, and encouragement as you navigate this new financial territory. Additionally, plenty of non-profit or government-supported financial assistance programs can help you with bills, debt, and other financial struggles. You don’t have to go through this alone. Many resources are available to help you manage your finances, build wealth, and prepare for your future. Whether you’re just starting or want to refine your money skills, plenty of resources are available to help you along the way.