May the 4th Be With You: 4 Money Lessons for Becoming a Financial Jedi Master

May 3rd, 2023 by Legacy Wealth Planning

When it feels like the galaxy’s forces are all working against you when it comes to your finances, fighting back may seem incredibly daunting. However, becoming a financial Jedi Master is not as hard as you think. Here are four money lessons that may help you gain wisdom, perspective, and possibly some mastery of your finances.

Keep Your Goals SMART

Financial goals like “save more” or “lower debt” are a good start. However, they may not get you where you need to go without more details, and they might be difficult to track. Instead, make your goals SMART:

  • Specific
  • Measurable
  • Actionable
  • Relevant
  • Time-bound

For example, rather than having a general goal of “save more,” you might be more specific by changing your goal to: “Save $6,000 by the end of the year by putting aside $500 each month into a savings account.”

A general goal of “lower expenses” may include reviewing your monthly subscription costs to eliminate unnecessary accounts or lowering your total spending by 5% each month until you are at a specific spending level.

Having actionable goals with a timeline may make these goals easier to manage and give you a clearer way to monitor your progress.

Learn From Your Failures

Everyone makes financial mistakes at some point. Some common mistakes include carrying too much credit card debt or missing out on an employer’s matching funds by not contributing to a 401(k).  

Sometimes these mistakes lead to important financial lessons. Instead of letting your economic failures get you down, you should reflect on them. Then, decide what to do differently if the situation presents itself again. For example, if you sell some investments at a loss just before they rebound in value, next time you might consider not selling at that time.

See the Big Picture

No good financial decisions happen alone. It is important to consider the big picture before making any major changes.

For example, purchasing a home may seem like a wise idea if your mortgage payment would be less than your rent. However, mortgage payments are not the only expense associated with owning a house. By looking at the big picture, which includes moving expenses, taxes, insurance, home maintenance, and a potential increase in utilities, you may more clearly evaluate your options.

Advocate for Your Worth

Only about one in three workers ask their current employer for a raise. This statistic may mean the other two-thirds receive less than they should.1 With inflation on the rise and many businesses increasing their starting hourly wages due to worker shortages, now may be a good time to negotiate a higher salary.

Although cutting expenses goes a long way toward freeing up some extra cash each month, increasing your income might allow your salary to keep pace with inflation while also providing you with some additional resources in your budget.



Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by WriterAccess.

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