Congratulations on deciding to take control of your finances! Even the most financially savvy people had to start somewhere, so if you’re new to the game, you’ve come to the right place.  

Take the first step on a rewarding journey towards financial prosperity with these five essential tips for beginners.

#1 Start with a Budget

Some part of you already knows you need to budget, but it’s not like you’re stoked to sit down and start building it (or actively sticking to it). Many people avoid budgeting because the very concept makes them think of rules, limitations, and restrictions—and who wants that?  

Yes, a good budget is about regulating and managing your (sometimes excess) spending, but you can (and should) allocate a little cash flow towards fun. You might actually find that it gives you more financial freedom.

You won’t feel bad about going on vacation, eating out with friends, or buying concert tickets to see your favorite band—as long as it’s within the budget. Trust us, learning to view your budget as a resource rather than punishment will make a world of difference.

#2 Reach Out

As a beginner, enlisting the help of financial pros can be intimidating. However, reaching out at the start of your financial journey is much more beneficial than waiting until you know what you’re doing. Sure, there’s a lot to be said about learning from your mistakes, except when those mistakes cost you buckets of money before they become valuable lessons.  

Seeking help from wealth management services early on can help you to bypass these rookie mistakes so you can get what you came for—increased wealth!

 #3 Keep It Simple

At the end of the day, being good with money can be boiled down to one simple truth: you have to bring in more money than you spend. Okay, easier said than done, but that doesn’t mean you shouldn’t approach your financial decisions with this guiding principle in mind. 

Whether it inspires you to cut down on unnecessary expenses, encourages you to get serious about saving, or fires you up about taking on a side hustle, keeping your ultimate goal simple can make the process simpler, too.

#4 Look Forwards (and Backwards)

Before you make any big changes or decisions, it’s important to consider your past and future by practicing reflection. This will help you set attainable goals, notice financial patterns, and avoid repeating your mistakes. 

As you look to the financial future, ask yourself: 

●       Am I planning on making any big life changes (like starting a family) in the near future?

●       What does my career trajectory look like, and how does that impact my finances?

●       Does investing in real estate make sense for my lifestyle?

●       Which debts do I need to pay off the most? 

As you reflect on your financial past, consider: 

●       What have my biggest sources of debt been?

●       Has my salary increased over the years?

●       Were there any big purchases (like a luxury watch or brand-new vehicle) that I regret?

#5 Don’t be a Victim of Lifestyle Creep

Lifestyle creep is a phenomenon that occurs when your discretionary spending rises with every increase in salary or income. It’s fine to receive a promotion at work and treat yourself to something special, but be careful that you don’t let this get out of hand. You won’t amass any meaningful savings if your income-to-expenses ratio never changes.  

When lifestyle creep occurs, you may feel even more strapped for cash than you did when you were making less money.

Embrace this Amazing Learning Opportunity 

If you start to feel overwhelmed, take a moment to stop, breathe deeply, and remember what a wonderful journey you’re embarking on. Learning about finances can positively impact almost every aspect of your life, and keeping this in mind will motivate you to keep going. Don’t forget to give yourself a pat on the back and be proud of your proactive approach!