Money Lessons From Sarah Hamdan
Money can set your heart racing. Sometimes it's in a good way, like when there's a 30 percent sale at Manolo Blahnik (suddenly there's no need for calculators) or you get that text message from your bank that your salary has now plumped up your bank account. Sometimes, it's not so good, like when you have to pay obscene amounts to replace tyres on your car or when your salary doesn't seem to last as long as you'd like it to, but you can't figure out why. So why do most people's eyes seem to glaze over when finance talk comes to the table?
Here's the thing: I used to be a financial advisor once upon a time. For years, my job involved helping people manage their budgets, decide where to invest, and learn how to recession-proof their accounts.
So I bring you these simple tips and tricks from lessons learned in my career as a financial advisor. The best part? You'll find out that you're better than you thought you were at managing your money.
Change Your Attitude
It's not boring, scary, someone else's problem, or something that will work itself out. Taking control of your finances will actually make you feel pretty good when you're saving up for an amazing present for your husband's birthday or that big trip you've wanted to take for years. You're making it happen and that's truly something that will make you proud.
Excel Is Not Evil
Excel is your best friend. You can find plenty of samples online called 'household budget' that you can download. All you have to do is fill it in every time you spend or save, big or small, and voila – you're on your way to financial budgeting. This will help you keep track of your expenses. Didn't realize your daily double caramel frappacino was costing you at the end of the month as much as your car payment, did you?
Invest Your Cash
So you mastered excel and you're on top of your budgets to the point where you've saved enough. Now what? Now, you look into investment options that suit you. It could be property or gold, stocks or bonds, or a number of other lucrative options that promise a better return. Think of it this way, do you want to make 2 percent interest at the bank, or would you put your money in a property that will likely rise by 10 percent in a few year's time? Either way, do your research, and just know that letting cash sit in the bank is making you the least return possible.
Keep A Secret Stash
That said, always have some emergency funds ready at your fingertips, ideally enough to last you about a month should anything happen. It's not a good idea to have all your money tied up in a way that prevents easy access should you need it; for example, if you've put all your money on a down payment in property, you won't get it back unless you find a seller at a price you want. Similarly, if you have your money tied up in a lucrative business, it's tough to get it back at the moment you need it. While it's never good to leave the bulk of your cash sitting in the bank, it's also not good to go to the other extreme and invest all you have in an illiquid asset. You never know when there will be a sudden medical emergency, international flight, graduate school tuition payment or deposit on your dream house that you'll need asap!
Developing healthy money habits isn't all about frugality. If you indulge in a weekend getaway for you and your love, a beautiful anniversary present for your parent's 50th, or splurging on the bag you've had on your net-a-porter wishlist for a year after you get a promotion, it will feel like a true reward.
Make It Last
Cars, renewing an apartment's lease at a decent rent, the jeans that fit just right – find a way to make your stuff last instead of shelling out on cheaper alternatives that won't go far. Take care of your things. Definitely spend when you need it, but make the most out of what you have.
Don't Rely On Debt
Credit cards? IOU's to your best friend? The sooner you pay them off, the better control you will have over your finances. Piling up debt can be stressful, especially when you have no other alternative, but developing the habit of paying off credit bills on time will save you late fees and headaches.
Make Banker Friends
They tend to keep track of the most lucrative sectors to invest in, when the property market will cool off, and the flashiest places to splash your cash.
Who knows? You might pick up a tip
or two during dinner.