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How To Be Better With Money In 2024

As autumn leaves begin to fall and we find ourselves in the latter part of the year, it’s a thoughtful time to start planning for the future. Looking ahead to 2024, one of the most beneficial resolutions you might consider is enhancing your financial well-being. Whether you’re at the helm of a business or simply striving to optimize your personal financial landscape, the cornerstone skill to develop is financial literacy.

Financial literacy encompasses the ability to decipher and adeptly navigate financial matters. This proficiency is indispensable not just for individuals, but also for businesses. It empowers you to make judicious decisions regarding your financial assets and to lay down robust plans for the forthcoming year.

However, in spite of its paramount importance, financial literacy often doesn’t receive the attention it deserves. Data suggests that many individuals are not well-versed in basic financial principles, which can lead to challenges in effective money management. Such shortcomings can precipitate issues like mounting debts, financial unpredictability, and missed growth opportunities.

Ready to embark on a journey to financial empowerment? Keep reading to discover actionable steps and insights to elevate your financial literacy for 2024 and beyond.

Budgeting

Budgeting is an important aspect of financial literacy, as it involves creating a plan for how you will earn, save, and spend your money. A budget helps you to track your income and expenses, identify areas where you may be able to cut costs, and ensure that you are saving enough money to meet your financial goals.

There are several steps involved in creating a budget. Let’s take a look at them.

Gather

The first step is to gather all of your financial information, including your income, expenses, debts, and assets. This will help you to get a clear picture of your financial situation.

Categorise

Next, you will need to categorise your expenses into fixed and variable categories. Fixed expenses are those that remain the same each month, such as rent or mortgage payments, while variable expenses are those that can fluctuate, such as groceries and entertainment.

Create a Budget

Once you have a clear understanding of your income and expenses, you can start to create your budget. This involves setting financial goals and allocating your money towards those goals. For example, you may want to save a certain amount each month for emergencies or for a down payment on a home. You can also use your budget to identify areas where you may be able to cut costs and save money.

What Budgeting Isn’t

It’s important to note that budgeting is not about restricting your spending or depriving yourself of the things you enjoy. Rather, it’s about creating a plan for your money that helps you to achieve your financial goals and live within your means.

Once you have created your budget, it’s important to review it regularly to ensure that it is still accurate and relevant. This may involve making adjustments as your income or expenses change. By regularly reviewing and updating your budget, you can stay on track and make progress towards your financial goals.

Saving and investing

Saving and investing allow you to set aside money for the future and potentially grow your wealth over time. The two are very different

Saving

Saving money involves setting aside a portion of your income for future use. This can include saving for short-term goals, such as an emergency fund or a down payment on a home, as well as long-term goals like retirement. It’s important to have a savings plan in place, as it can help you to manage your finances more effectively and provide financial security in case of unexpected expenses or changes in your income.

Investing

Investing involves using your savings to purchase assets that have the potential to grow in value over time. This can include stocks, bonds, mutual funds, and real estate, among others. The goal of investing is to generate a return on your money, either through interest, dividends, or capital appreciation.

There are many different investment options available, and it’s important to choose those that are appropriate for your financial goals and risk tolerance. For example, if you are saving for a short-term goal, you may want to invest in relatively safe options like bonds, which offer a fixed return but carry less risk than stocks. If you are saving for a long-term goal like retirement, you may be willing to accept more risk in exchange for the potential for higher returns, and may choose to invest in a mix of stocks and bonds.

It’s important to note that investing carries some level of risk, and there is no guarantee that you will achieve a positive return on your investments. It’s essential to do your research and understand the risks and potential rewards of different investment options before making any decisions. Seeking the advice of a financial professional can also be helpful in making informed investment choices.

Financial Literacy

Credit 

Credit is a financial tool that allows you to borrow money from a lender in order to make purchases or investments. It can be a useful tool, as it allows you to make purchases that you may not be able to afford upfront. However, it’s important to understand how credit works and to use it responsibly, as it can also be a source of financial risk.

One of the key concepts to understand about credit is your credit score. Your credit score is a number that reflects your creditworthiness, or how likely you are to repay a loan. It is based on information in your credit report, which is a detailed record of your credit history. Your credit score is used by lenders to determine whether to approve you for a loan and, if so, at what interest rate. A higher credit score typically indicates a lower risk of default, and may result in a lower interest rate.

It’s important to understand the terms of any credit agreements you enter into. This includes the interest rate, the fees associated with the credit, and the repayment terms. It’s also important to be aware of any penalties for late or missed payments, as these can have a negative impact on your credit score.

To use credit responsibly, it’s important to only borrow what you can afford to repay, and to make timely payments on your debts. It’s also a good idea to diversify your credit sources, as having a mix of different types of credit (such as a mortgage, a car loan, and a credit card) can improve your credit score.

By understanding credit and using it responsibly, you can take advantage of its benefits while minimizing the risks.

Taxes 

Understanding taxes is an important part of financial literacy, as taxes are a necessary part of life and can have a significant impact on your financial situation.

To understand taxes, it’s important to be familiar with the different types of income that are taxable, as well as the deductions and credits that may be available to you. Some common types of taxable income include wages, salary, and tips, as well as income from investments and rental properties. Certain types of income, such as child support payments and gifts, may be tax-free.

Understanding taxes is essential for managing your finances and making informed decisions. It can help you to maximize your deductions and credits, and to plan for the tax implications of financial decisions. It’s also important to be aware of any tax changes or updates to tax laws, as these can affect your tax liability.

We can help you get a good grasp of your taxes.

In addition to these core concepts, financial literacy also involves understanding the financial products and services that are available, such as bank accounts, loans, and insurance. It also involves being able to make informed decisions about financial matters, such as whether to rent or buy a home, or how to save for retirement.

Improving your financial literacy can have a range of benefits. It can help you to manage your finances more effectively, make better financial decisions, and plan for the future. It can also give you greater control over your financial situation and increase your sense of financial security.

Are You Ready To Be a Little Better With Money In 2024?

There are many resources available for improving your financial literacy and being better with money. These include educational materials, financial planning tools, and online courses and workshops. But you can also talk to a professional. At Countplus, we have a team of finance experts who can help you, and we also partner with WorktoLive Financial Planning who can come alongside you and build a budget that works for you or your business.

Financial literacy is a crucial skill that can benefit individuals and businesses alike. It enables you to make informed decisions about your financial resources and plan for the future. By improving your financial literacy, you can increase your financial security, stability, and opportunities.

Get in touch with Countplus today, or check out our other blogs for more useful advice and information like this.



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