You are more financially-capable than you think

One of the biggest problems that continue to hound Americans today is the lack of awareness of financial health.

In fact, there are people who earn six-figure salaries but continue to struggle financially, just because they do not know how to manage their financial resources very well.

This is evident in a recent study has revealed that in major American cities, nearly half of every household seems to live in a state of financial insecurity either through the lack of having saved money for emergencies or their future.

In terms of spending, the US Census Bureau has reported that over the years, the spending habits of Americans have changed dramatically. Based on statistical data, an average American spends most of his earnings on transportation, food, and housing.

How Americans spend their money

Based on the Consumer Expenditure Survey, the highest chunk of the spending goes to the housing at 41%, followed by transportation at 16% and food at 14%. The rest of the amount goes to healthcare at 8%, utilities 7%, entertainment 5%, clothing 3%, education 2% and miscellaneous expenses at 3%.

But regardless of how much money you earn, it is critically important that you know how to manage your finances effectively and efficiently. Anyone can, in fact, be financially-capable and it’s not rocket science either.

Traits of financially-capable people

You might be surprised to find out that financial wellness is well within one’s reach. People who often practice sound financial management could easily tell you that you do not have to be a money guru to be able to manage your finances.

Many if not all of the best traits of financially-capable people are in fact practical and achievable. You do not have to go get a college or university degree to be one, rather a willingness and determination to stick to the discipline and learning the ropes through practical applications.

Budget consciousness

The best managers would often tell you that the best laid plans are always the most effective ones and can lead to success. The same goes with finances.

Budgeting is really important to let you know how to manage your spending wisely. Knowing how much resources are available and establishing thresholds for it is important to know how much you need to allot or spend.

Be educated about personal finance management

One of the best ways to seek knowledge about personal finance management is through your company’s employee financial wellness programs. Ma y of these employee financial wellness programs are catered and tailored to the nuances of the nature of your employment.

This means that the advice you get from program advisers and consultants is more appropriate for your earning percentages and brackets as well as your professional skills and talent. You will be getting sound advice on finance management approaches at are ideal for you.

Spending wisely and judiciously

Your ability to spend money should be anchored on your primary goal of practicality and necessity. In fact, wise spending is somewhat contrary to the term because the goal is to do less of it.

Prioritize spending on things that you need. If you see something that catches your fancy, take the time to think it over first. Do you really need it right away or you can save up for it?

Always remember that you don’t spend for something with money that you don’t have, such as the case of your credit cards. It has become very easy to spend left and right with the swipe of the card. So make sure that you only use your credit card for emergencies.

For your fixed costs such as food, housing, and transportation, you may be able to make adjustments from your usual habits that could help you save a few dollars on each.

Start building the habit of saving

Your goal must be to save money and you can get creative with it. You may set a goal of saving 10% on everything that you spend. Example, if your gas budget is $50 each week, you may try to make adjustments by taking days off from driving by taking the bus or subway train to work to save you $5 a week.

You can also try to cut down on utilities by using energy-saving lighting fixtures such as LED lights that are cost-efficient and lasts longer which could generate savings of up to 20% to 30%.

Always remember that anyone can be financially capable of effectively managing your finances. You can be sure that it can help you become financially healthy and give you more freedom to effectively dispense with your finances without stress or worries.

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