Are You Financially Savvy?

By Melissa Houston, Contributor

It is estimated that within a decade that women will control 65% of the world’s wealth. Women are getting more comfortable managing their own money, and rich women are increasingly calling the shots.

There is no shame in making money or investing in yourself and your financial future. Many people often feel a lot of fear or intimidation when it comes to managing money, and if you fall in that category, it’s time to start investing in yourself. Financial literacy skills are essential in money management.

Working women at their store. getty

Business owners have an advantage in building wealth as their business can be their largest financial asset. When you own your business, the net financial worth of that business makes your personal net worth.

These are exciting times for women, and we have more financial control than ever, and that control will keep growing. But are you financially prepared?

The value of your assets does not just determine your wealth. You need to have good money management skills to increase your wealth with intelligent investments rather than making poor money choices. The key to wealth creation is in how you manage your money.

Even the wealthiest people can lose it all when they don’t manage their money well, take too many financial risks, and don’t protect their principal investments.

Here are the top tips you can take to build and protect your wealth:

1.    Always live within your means

Even millionaires budget, so regardless of your financial wealth, you need to ensure that you live within your means. The key to financial happiness is when you live within your means and create financial stability for yourself.

2.    Invest in appreciable assets

Mindlessly spending money and not considering whether what you are buying will make money for you in the future or not will erode your wealth. Wealthy people understand that you need to invest your money in appreciable assets such as property or stocks, not vacations and cars - excessive spending on items that add nothing to your investment portfolio chips away at your wealth.

3.    Do not give your financial power away

All too often, there are stories of wealthy people who have put all their trust in their financial managers only to find out they have been stolen from and, sadly, lost all their wealth. It would be best to protect yourself and your money from being a victim of such crimes, and being involved in your finances will prevent anyone from taking advantage of you.

Invest In Yourself on brick wall getty

4.    Be smart and informed

Take the time to learn the basics of managing money, even if you use a trusted advisor. Nobody will care about your money more than you do, so understand the financial decisions and ensure you are comfortable with them. You need to understand your risk tolerance and what you are investing your money in. If your investments are not aligned with your values, that will cause conflict within yourself.

5.    Create a financial plan for yourself

Having financial goals and creating a plan to achieve them gives your money a purpose. It is wise to develop a financial plan and monitor your progress against that plan each year. That will help you stay accountable for your goals.

The bottom line is that good money management is key to creating wealth. It’s not how much money you make that dictates your wealth; it is your net worth that does. Making smart financial decisions will increase the value of your investment portfolio and your net worth.

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