Whenever you start a new job or get a promotion—and thus, a higher salary—it’s a good time to look at your finances. Your new salary will affect your budget and ability to set aside savings.
Really, though, financial literacy should be an ongoing endeavor, even if you haven’t made a recent move. However, many people are intimidated by money and investing, and it can lead to shying away from proactively managing finances.
I’ve always been a saver, and I credit that to learning about finances early on. But it’s never too late to develop or improve your financial literacy and it doesn’t have to be overwhelming, especially with the help of a financial advisor. Here are a few simple ways to get started improving financial literacy, no matter where you are in your career.
What’s your motivation?
Whether you consider yourself a financial newbie or have already begun saving, look at what motivates you. What’s important in your life to save or invest for?
For me, I want to have enough money to be comfortable when I retire, and I want my kids to go to the college of their choosing. In addition, I like to have enough savings to cover three to six months of expenses to be prepared for anything unexpected.
Your reasons may change over time. Keep checking in with yourself. A recent college graduate will almost certainly have different motivations than someone with young children or someone near retirement. Stay focused on your goals and you’ll lay the foundation for success.
When I was younger, my dad gave us a monthly allowance. He told us we could do whatever we wanted with it. Once it was gone, though, we wouldn’t get any more. Decisions like buying candy or toys suddenly took on more importance.
Another thing my dad instilled in us: If we wanted something, we had to write it down on a piece of paper, put it on our mantle, and leave it there for a week. After a week, if it was something we still wanted and we had saved enough money, then we could get it.
Both of these exercises shaped me from an early age. The allowance was a crash course on budgeting, and the mantle was a lesson on how immediate gratification isn’t always the best course of action.
Examining your spending is the cornerstone of financial literacy. As you’re getting started, make it easy on yourself. Go through your credit card statement and bills. What are you paying for that you don’t need?
I went through this exercise myself recently and realized I had a gym membership that hadn’t been used in months and a phone line my family hasn’t used in years.
We are also living in the time of the subscription and many of us get reeled in by introductory rates. What you signed up for may have been a “steal” at one point but take the time to re-evaluate. See if it’s a service you’re actually using, especially if your original rate has expired.
Additional resources to discover
Identifying the best way to continue educating yourself about financial literacy is the third step I recommend. There’s so much information out there that it can feel easy to get lost. One thing that can help is determining the medium(s) where you learn best.
Are you a fan of video and audio? Or do you prefer reading your information? Knowing what gets you excited to learn will help the lessons stick.
For me, I like a mix of books, podcasts, and tools. Here are a few of my favorites:
Books: The Millionaire Next Door and Rich Dad, Poor Dad are older books but the lessons still stand today. Even more importantly, they’re simple and straight to the point, so you can get started implementing the information right away.
Podcasts: If you prefer learning via audio, the So Money Podcast is one I really enjoy. It features interviews with guests in the finance space and the host offers answers to listener questions which range from saving for retirement to paying off debt and everything in between. NPR’s Planet Money and Bigger Pockets Money, are two other excellent options.
Tools: It’s worth exploring tools to help automate your investments. Your company may offer an automatic withdrawal for 401(k) accounts or putting money toward education. There are also several free apps that help with evaluating your budget and expenses, like Intuit’s Mint.
These resources offer great starting points and lessons, no matter what your current financial situation is like. We can always find ways to improve and be smart with our hard-earned money.