Financial empowerment is about being in control of your money rather than your money controlling you. It’s about setting goals, building and executing a plan to maintain or improve your chosen way of living and having a strategy to handle any emergencies that may arise.
Here are some financial empowering ways that can help you get on the right path.
1. Change your mindset
“Financial empowerment is about mind as much as money. Planning, taking the time to strategise and aligning your spending and savings with your long-term goals all contribute to a logical, calculating approach to money.”
You can even have some money mantras to help you.
2. Become financially literate
At M for Money, we share some hints and tips to improve your personal finances as well as money-saving tips. You can get these here. https://m4mcu.org/news/
There are also lots of free resources that can help you such as podcasts, videos, blogs, books and even financial literacy apps such as the MoneySkills App.
3. Set your goals
Make SMART (Specific, Measurable, Achievable, Realistic and Timely) goals to help you know what you want to do in future with your finances. Here is some guidance on how you can set financial goals.
4. Check your credit score
Fix past mistakes by checking your credit score and seeking help where required.
What is a credit check?
A credit check, also known as a credit search, is when a company looks at your credit report to understand your financial behaviour.
Companies that may do a credit check on you include financial institutions such as banks, credit providers, letting agencies and landlords, mobile phone companies, utilities suppliers and some employers.
There are two types of credit checks – a soft credit check (soft search) and hard credit check (hard search).
A soft credit check is an initial look at certain information on your credit report. Companies perform soft searches to decide how successful your application would be without conducting a full examination of your credit history. Examples of soft credit checks are searching your own credit report, company searches your credit report as part of an identity check or using a credit check service.
A hard credit check happens when a company makes a complete search of your credit report. Each hard check is recorded on your report, so any company searching it will be able to see that you’ve applied for credit. Examples of when a hard check can happen is when you are applying for a loan, credit card, mortgage, utilities, mobile phone contract.
Too many hard credit checks over a short period of time can affect your credit score for six months, reducing your ability to get approved for credit in the future.
You can check your credit score on websites such as Experian or Transunion to see how lenders may see you. Some of these are free to use while you would need to pay for others.
5. Create a plan
After setting your goals, you should create a plan of how you will get there.
The first step is to make a budget to help you make decisions of where you can cut back on your spending. Not only does budgeting give you that control over your money but will also help you form a positive relationship with money.
You can learn more about budgeting here.
6. Plan for a rainy day
No matter how good your plan is, always set money aside for unexpected occurrences such as home repairs, transport repairs or unexpected bills. You can do this by opening a savings account with M for Money.
If you are need of a loan and don’t want to pay high interest rates, you can use the M for Money loan services at affordable interest rates.
7. Monitor your progress
While you may have set goals, created your budget and got a new mindset, checking your progress regularly and adjusting as needed is critical to your financial success.
“It’s a good idea to sit down and review your budget and plan every few months or any time your income or expenses change significantly. Track whether you’re sticking to your budget, your saving and investing goals, then identify places to adjust your spending. If your income has gone up or expenses have gone down, adjust your savings and investing goals accordingly.
It’s also important to monitor your credit, so identity theft or errors in your credit report don’t undermine your hard work.” If you see any transactions that you don’t recognise, always dispute them in writing so that it can be investigated by the credit bureau.
Become Financially Empowered
No matter what your income is — or how much debt you’re in — financial empowerment can be attainable, help reduce your stress, improve your standard of living and help you achieve your long-term goals.”