While working with a CPA, MBA or another kind of professional financial advisor can dramatically improve your finances, it’s also important to learn best practices for personal finance management on your own. Financial independence is largely about your ability to navigate money planning, spending, saving and investment to suit your needs over long periods of time. If you’re ready to take your finances to the next level, a bit of research and some careful budgeting can go a long way. As you learn more, you’ll be able to meet your financial goals, save more money, and make better investments with these finance skills.

Becoming financially savvy starts at home. Get started growing your money with these three steps:

1. Set Clear Financial Goals

Set Clear Financial Goals

Setting Financial goals is an important first step in achieving the life you dream of. While you won’t reach your financial goals overnight, having a destination in mind will help to motivate you to do the work necessary to help you achieve your goals while clarifying a plan of action. In other words, setting some limitations as to what you want to achieve, it’ll be easier to start taking action. Whether you’re saving for a big event or putting money away for retirement, clearly defining your goals will help you put together a solid set-by-step plan to get there while also providing a metric for how well you are doing. This is also helpful in establishing timelines that are both achievable and modifiable.

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Experts recommend using the SMART method to set your financial goals. With specific, measurable, actionable, realistic, and time-bound long-term and short-term goals, you’ll be able to clearly define a strategy to help you make more money.

Manage your financial goals by practicing regular financial planning. During this time, be sure to review your goals, make updates as needed, and track your progress over the past few months and years. This period of planning will give you the best opportunity to reassess your goals and make plans for the next steps in achieving your future objectives. Keep in mind that setting both short- and long-term financial goals will help you grow now while you set a foundation for future goals that you hope to achieve in the coming years.

2. Spend Less, Save More

As basic as it might appear, the rule of spending less and saving more is surprisingly hard to follow at times. For example, people tend to save less when they start making more money, largely because the extra income is treated as expendable. Nevertheless, spending less than one makes it the fastest way to live within your means and grow your savings over time. Experts recommend saving 15% or more of your income and investing as much as you can in ways that you can earn compounding interest. This way, you’ll adopt the habit of putting a portion of everything you earn into your savings and will not be tempted to spend that extra income.

In addition to automatically taking a chunk out of your earnings for savings, another way to spend less and save more is to avoid living beyond your means. Whether you’re considering a loan or you like to use credit cards, it’s best to avoid taking on this type of debt if you don’t already have the money to pay them off immediately. This way, you’ll be able to avoid the interest and potential damage to your credit score that comes with taking on debt.

Another important step to take in saving more than you spend is to create a budget. Your budget will help you reign in your spending, pay off debt, and keep you on track with your goals. A basic budget starts with adding up your expenses for each month and subtracting this from your income. While this budget can get a bit challenging depending on your expenses and earnings, it’s important to stay on track with your budgeting if you hope to save more money.

3. Start Investing Sooner Than Later

Start Investing Sooner Than Later

Investing early on is an important rule for anyone hoping to grow their personal finances as much as possible. As anyone in the industry will tell you, the road to understanding how to become a successful financial advisor for your own finances is filled with careful planning and a growing understanding of investment strategies that work over the years and decades. For starters, you should try to learn about the magic of compounding interests. With compounding interest, your savings will continue to accrue interest as you invest more. Thus, the more time you give your money to grow in a retirement fund or other investment class, the more money you’ll have in the future. Unfortunately, unless you have a large lump of cash already, there is absolutely no substitute for growth over time. Whether its ten dollars or a million, the earlier you invest the larger the return on that investment.

Start saving and investing as soon as you can to improve your finances for retirement, as well as your savings in general. For example, if you’re hoping to purchase a home or make any other large purchase, a high yield savings account can help you reach these goals.

The world of finances can be quite complicated, but managing your own money shouldn’t intimidate you. Keep this guide in mind as you learn how to improve your finances at home.

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