7 Money Management Tips We Recommend for Every Income Level and Stage of Life

Everyone needs a financial plan unique to their goals and desires, but there are a few “money management truths” that are smart strategies for everyone, regardless of income level or stage of life. 

Here are the 7 money management tips we recommend for creating a strong financial foundation! 

1. Create a Budget

One of the most basic strategies to help reach your financial goals is to save more than you spend. Creating a budget allows you to track your income and expenses to spend money accordingly. 

This will also help you identify areas where you can easily cut back. Watch out for places where you are unintentionally overspending, such as a paid subscription you don’t use anymore. 

There are many personal finances apps to help you create a budget, or you can make your own in Microsoft Excel or Google Sheets. 

2. Establish an Emergency Fund

This is one of our top recommendations to new clients. Most financial experts will recommend saving the equivalent of three to six months of expenses in an emergency fund. The amount you need in your emergency fund will be unique to your situation. For example, if you lost your job, but your experience is in high demand, you may be able to resume working in less than a month. 

In the event of an unexpected job loss or a significant expense, this emergency fund will provide easy access to the money you need to pay bills, provide for your family, and find a way forward. 

3. Minimize Debt

Debt is often either over-criticized or underestimated. We like to find a healthy middle ground in the belief that debt isn’t condemned, but it does have consequences. 

Like many things, the problems with debt result from how it’s used. If you are a homeowner, you may have had to take on a mortgage in exchange for the best place to raise your family. This is not a cause for concern. On the other hand, extensive credit card debt can dig a hole that’s more and more difficult to climb out of. 

See how you can use your budget to begin paying off your debts, prioritizing your high-interest debt.

4. Engage With a Financial Advisor

There are several ways to manage your money independently, but there are greater benefits to working with an expert. 

A financial advisor can help you set short and long-term financial goals and create a strategy to reach them. 

If you don’t already have a financial advisor who’s been intentional with your financial goals, we’d love to talk!

5. Consider Generous Giving

This can sometimes feel counterintuitive when many of your financial goals focus on saving more and paying off debt. Over the years, however, we have found that our most generous clients are the most financially content. They see money as a tool, not only for their own needs but to meet the needs of others. 

We always remind our clients that charitable giving has an impact no matter how much. It’s not always about how much you give, but that you desire to make an impact in the world around you by blessing others. 

6. Plan for Retirement

If you’re wondering about the best time to start saving for retirement, the answer is now. The earlier you start planning, the more freedom you’ll have once you reach this new season of life. 

Retirement planning isn’t just about saving part of your paycheck for the future. There are several retirement investment accounts that can help you maximize your input for financial freedom in the future. 

7. Invest Wisely

Investing can help you reach long-term financial goals faster than a simple savings account. Diversifying your investments minimizes your risk and increases your chances of success.

Because portfolios and mutual funds are a “black box,” where you put in funds and hope for a positive return, many investors never know the types of companies they are investing in. You could be investing in areas that don’t align with your values. 

Sovereign Financial provides a way for value-driven individuals to invest in the areas that matter most to them and avoid the ones that conflict with their beliefs. 

Contact us here to learn more about if your investments align with your values!

Working With Sovereign

Whether you’re just starting your financial planning journey or are entering a new phase of your life, our advisors can help you identify your strategic next steps. 

Contact us here to schedule a consultation!

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