7 Insider Secrets To Master Your Money

You know that one friend who actually seems to understand their taxes or who feels comfortable saving for retirement? They may have mastered financial intelligence. While business leaders can be lauded for their financial intelligence, this skill set translates into real-world benefits for everyone. 

Learning how to build your financial intelligence can be the first step towards early retirement, more vacations, or financial freedom. Read on to learn how to see how your financial intelligence stacks up, and then level up your skills!

What does it mean to have financial intelligence?

Financial intelligence is usually defined as intelligence that combines knowledge and understanding of personal finance to use money responsibly. 

The best part? With financial intelligence, you don’t need to be a millionaire, but you could save and eventually live a millionaire lifestyle even on a low salary. These skills can help you take control of debt, save for emergencies, and start reaching big financial goals. 

One more piece of good news: you don’t have to be good at math to have financial intelligence. Instead, think of it as practical skills that can build long-term wealth. 

How to be smart with your money: 7 strategies 

Financial intelligence is all about being smart with your money. Whether you’re making $30k, $300k, or anything in between, these habits can help you take control of your finances, save more, and enjoy your wealth. 

Live below your means

This is the #1 financial habit for long-term wealth building. Did you know that 78% of Americans live paycheck to paycheck? The 2023 survey conducted by Payroll.org suggests that if you already have built savings, you could be ahead of most Americans. The ability to spend less than you earn is the most important habit to build wealth over time. 

That means if you make $2,000 or $20,000 a month, you’ll need to create a situation where you can spend less, include savings in your budget, and create a bigger cushion. Lifestyle inflation is one of the biggest factors that can lead to overspending. Even if you get a raise or find a higher-paying job, try to keep your expenses the same to save more. Just because you can afford it doesn’t mean you need it!

Suppose you were making $4,000 a month, and now you make $8,000 a month. Don’t immediately buy a new car, get an auto loan, or move into a bigger house. Instead, see if you can use a little more for certain budget items but implement a pay-yourself-first savings plan and live well below what you could buy. 

How much should you aim to save? Many experts suggest 10% to 20% of your take-home pay, but if you want to save for early retirement, a down payment, or other big goals, consider challenging yourself to save even more. 

Use credit responsibly

In order to have better financial opportunities, including lower interest rates on mortgages and loans, building and maintaining a good credit score is essential. Responsible credit usage means by paying bills on time (set up auto-pay if you forget!) and don’t over-rely on credit.

You can keep an eye on your total available credit and make sure to only use a maximum of 30%. As credit building is about habit-building, 

Plan for retirement

Start saving early and take advantage of employer-sponsored retirement plans, including any employer-matched 401(k) options. If you are struggling to save a lot, start small. Consider a no-spend challenge, aiming for $20 a week or some other achievable goal, and build up gradually as saving becomes a habit. 

Exploring side hustles and ways to boost your income

Side hustle culture has gone mainstream, and there’s no reason you can’t consider one or more side hustles to boost your income. While some side hustles, like rideshare driving, are better to help make ends meet, others, like affiliate marketing or vlogging, could gradually become full-time careers with unlimited growth. 

Consider what you love, what skills you already have, or what you’d like to learn and monetize over time. 

Find ways to save on everyday expenses

Learning how to live below your means how to save on everyday expenses. For example, find ways to save on all your everyday expenses. Here’s a list of common tips and ways to cut back:

• Groceries: Plan meals, use a shopping list, and buy in bulk when items are on sale. Consider buying frozen or canned fruits and vegetables or shopping in season directly from farmers’ markets. 
• Transportation: You can carpool, use public transit, or bike when possible to reduce fuel and parking costs.
• Auto insurance: Shop around annually for better car insurance rates. You can also consider increasing your deductible to lower premiums and ask about discounts for safe driving so you don’t have to pay for high-risk auto insurance. You can also ask about bundling policies to get cheaper auto insurance. 
• Utilities: Install energy-efficient appliances and be mindful of usage to lower electricity and water bills. Unplug unused appliances to reduce energy leaks, and try reducing heating and cooling use even by one degree. 
• Coffee: Brew your own at home instead of buying from cafes daily.
• Entertainment: Look for free local events or use streaming services instead of expensive entertainment events like movies or concerts.
• Clothing: Shop sales, thrift stores, or online marketplaces for discounted items. You can also see how to repurpose clothes in new outfits or styles. 
• Personal care: Use coupons, buy in bulk, or buy generic brands for toiletries and cosmetics.
• Phone bills: Compare plans from different providers and only pay for the data you actually need.
• Subscriptions: Regularly review and cancel unused streaming services, gym memberships, or apps.

Plan for emergencies

Creating an emergency fund is essential to your long-term financial safety. Once you’re living below your means and saving, an emergency fund is the first savings to protect yourself financially. Aim for three to six months of expenses in a high-yield savings account. 

You can also use personal loans as a last resort in case your emergency fund cannot cover unexpected expenses like major auto repairs or medical costs. 

Educate yourself

Once you’ve mastered the first six steps, it’s time to keep learning! Keep learning about personal finance and stay informed about economic trends. Popular personal finance books as a starting point include Rich Dad Poor Dad, The Millionaire Next Door, and Think and Grow Rich. 

You can also find excellent online resources on sites like Benzinga and MoneyLion. For example, you can learn about creating a budget, consider the 70-20-10 budget, or consider a no-spend challenge.  

Final tips

If you’re new to budgeting, saving, or other financial concepts, there’s still time to learn and add financially smart strategies to your toolbox. Start slow with the tips above, master living below your means, and then consider how to save more. 

Remember, you can build wealth with any income! While a larger salary helps, your financial skills are more important. 

Key concepts to focus on include compound interest and how you can use it for long-term investing, as well as understanding how to save more on everything from mortgages to taxes. With time, you can gain more confidence in personal finance and build your financial intelligence!