5 Simple Steps to Begin Your Personal Finance Venture

For anyone who begins with their finance journey, it can be hard and overwhelming to begin with their first step.  From budgeting to building an emergency fund, there’s a lot that an individual needs to consider to ensure success. With some strategies that I recommend, you can start your journey on the right path. Here are five simple steps that I recommend are necessary and help you get started:

1. Define precise financial goals

Defining a clear roadmap is needed to keep you from getting lost on your venture. Whether it’s making sure that you save enough money for going to your dream university, buying an exotic car, having precise goals will help set you on track. Understanding your priorities and breaking your long term goals into separate steps is needed for financial prosperity. For example, if you want to save $10,000 on a BMW within six months, calculate the weekly savings required to reach your goal

2. Establish a Budget and Follow Through

A budget is the most important factor when it comes to managing your money. First, track your streams of income and the money you spend to understand where your money is going. By doing this, you will grasp a better understanding of what you need to change in your spending habits. To better organize your expenses and income sources, you can try to use Google Sheets.

3. Set an Emergency Fund

You never know when something can go sideways. This is why it’s necessary for every individual to have an emergency fund. This fund can help provide a backup for unforeseen expenses such as medical emergencies, family emergencies or even unexpected travel for work. It is completely okay to start small, but try to make regular payments to your emergency fund until your goal is attained.

4. Handle Debt

 If you’re dealing with debt, such as student loans or medical bills, it’s crucial to reduce it as swiftly as you can. Begin by tackling high-interest debts that accumulate quickly like credit cards, and then address those with lower interest rates that may have a less immediate impact. Finally, resist the temptation to take on new loans and increase your debt.

5. Begin Investing Early

For the people who are new to investing, it might look intimidating in the beginning, but it’s needed if you want another stream of reliable income. I started my investment journey with Robinhood, where I built a diverse portfolio by purchasing stocks from companies like Apple and NVIDIA, as well as the Schwab Dividend ETF. Through this experience, I learned to identify the optimal times to buy shares and maximize returns. The earlier you start, the more time your money can develop. Consider taking various LinkedIn courses, watching YouTube videos on investing basics, or reading foundational books like The Intelligent Investor by Benjamin Graham to hone in on your knowledge. Ultimately, investing is most effective when you set long-term goals and practice patience.