Personal Finance for Beginners: Getting Started
Personal Finance is a topic that often gets overlooked until the moment it becomes a problem. Money can be a difficult topic to discuss or seek advice on, and the abundance of misinformation doesn’t help the situation. Here’s a simple guide if you’re looking for a way to start your personal finance journey.
What’s the Goal?
Similar to my tips for investing, having a clear idea of what goals I wanted to achieve as a result of healthy finances kept me grounded and gave me something concrete to work toward. Whether it’s to buy your dream house, treat yourself to a vacation, or pay off debt, visualize what success looks like for you.
Run Your Own Race
The name personal finance is self-explanatory. Your financial goals and journey are yours alone, and all the advice or examples you see across mediums mean nothing if they don’t apply to your situation. The key here is to educate yourself on various financial topics and build your financial literacy. For me, this gave me the agency to make decisions that were tailored to my situation instead of trying to adapt someone else’s strategy or generalized advice.
Credit is not the Enemy
The biggest purchases for most people – a house, a car, a business – rely on credit. When used correctly, it grants flexibility and leverage. When used incorrectly, it leads to debt and ballooning interest. The key here is to be strategic about credit, increasing your credit score to capitalize on the best available interest rates and minimizing the money owed to borrowers. I like to think of my credit score as a measure of trust: the higher my score, the more borrowers “trust” me, allowing me access to more money at a lower cost, and maybe even some bonuses thrown in as well.
For another perspective on Personal Finance, as well as a budgeting template that could help make sense of your current situation, check out Chloe’s video below: