1. Seek Financial Education

Step 1: Reading this article. It is never too late to educate yourself! You don’t need to go to university to educate yourself on the financial world — we live in the era of technology. Answers can be found in mere seconds over the internet from almost any device. For example, don’t know the difference between credit and debit cards? Ask someone or ask your best friend, Google.

Keep learning new things.

2. Don’t let finance scare you

Finance is not complicated, do not let the numbers intimidate you. Do not let adulting scare you. It is important to begin your personal finance journey with an open mind and a clean slate.

Finance is very logical. If steps are followed, most routine problems can be solved. For example, which car insurance is best? First step, check the quote of your current provider and crosscheck it to the others. Make sure you are aware of what you are looking for and choose the most ideal. The most important thing about personal finance is it is personal. It is not about image and what looks best to the world. It is what fits best for you that matters.

That’s why we created Nova, to help millennials who want to improve their financial habits. Nova is the personal finance app that makes saving more compelling than spending because the AI makes it easy to understand habits.

Buying your first home? Planning a trip? Getting out of debt? Nova will put together a visual timeline to show you how you can achieve your goals. Nova provides real-time feedback on your spending patterns to improve your financial habits. Can’t save as much for the month? No worries! Nova will suggest adjusting your date of completion if you fail to reach your required saving for the month. The app allows you to prioritise your goals to see which order of completion you would like them to be in.

Whatever the goal, Nova’s got you covered.

3.Utilisation and Prioritisation

Recognise that you are held accountable for your finances. You are in charge of being financially responsible.

Golden Rule: Utilisation is set. Prioritisation is maintaining your utilisation.

Utilisation is how effectively something is used. In finance, utilisation can be seen as apportioning income. It should be seen as a target to be hit. Your task is to prioritise your utilisation. You have fixed and variable costs. For example, rent and loan payments are fixed and mobile plans or cable packages are classed as variable costs.

You need to figure out how much of your income goes towards fixed costs and how much you would like to put aside for variable costs. Remember, a portion should also be placed aside for emergency and savings.

For example, you could proportion 30% for fixed costs, 20% for variable and 10% for emergency funds. Then you can invest a portion of the balance and save the rest. Remember, you are allowed to indulge occasionally. Maybe utilise 5% for leisure. It is up to you. It is all a part of being financially responsible.

The proportions are up to you. This is a guide. The name of the game is to prioritise your utilisation.

4. Assets vs Liabilities

Often talked about by accountants, what are assets and liabilities on a personal level? Simple, assets represent what you own and liabilities are the amount you owe. For example, if you choose to buy a car and pay for it in full, this is an asset. If you take a loan to buy the car, it is seen as a liability. A loan shows you borrowed money to acquire the car, thus a liability.

5.Future Net Worth

Have you ever wondered why Peter Jackson has a net worth of $550 million? What does it mean to have net worth? Simply put, net worth is the amount of assets owned by a person minus his/her debt. It is important to track your own net worth. Simply understand your assets and liabilities, then subtract all your liabilities from your assets. This will give you your net worth. This is a great way to motivate yourself to keep on track and increase your net worth.

6.Financial Planning

Spreadsheets. Spreadsheets will be your best friend through your journey of personal finance. A spreadsheet gives you autonomy to customise it to your needs and goals. It is simple and it works

7. Time Value of Money

Time value of money is simply defined as this: the value of an amount of money today is worth more than the identical amount at any future point in time. Why is that? This is because a person willing to receive the same amount at a later time rather than the present wastes the opportunity to invest the money. For example, Sally receives $100 today in cash and chooses to invest it at an annual interest rate of 5%. Her present $100 would be worth $105 in a year. If she chose not to invest, her present $100 would only be worth $95 in a year, due to the loss in value of money over the year.

8. Passive Income

Sit back, relax and let money work for you. Your monthly paycheque is known as active income - money made from providing or performing a service. Passive income is money made from doing little to nothing to keep it coming. Investing in the stock market, real estate or even the bond market are some ways to generate passive income.

9. Debt Trap

This is a real phenomenon that affects more people than we think. According to the Money Statistics May 2019 report, the average UK household has a credit debt of approximately £2,655. The median salary of a fresh graduate in 2020 is said to be £2,500. The household credit debt is $155 more than a fresh grad’s income! Isn’t that alarming? Very. Remember, do not spend more than you can afford. A credit card is meant for cash flow, not as a money provider that provides money you do not have. You will fall into this trap and it can spiral.

10.Never stop working on your finances! Persevere

Shit hits the fan, mistakes happen. What’s important is learning from mistakes and moving on. Don’t let one malfunction dither you from venturing further on your journey of personal finance. It is a never-ending lesson and with experience, comes ease. Remember, this is your journey and never fear asking. No one will care about your personal finance the way you do. So if you don’t care, who will?

Start today, it’s never too late.

Download Nova now to get started on your journey to financial freedom! Finance doesn’t have to suck, you are but a tap away from improving your finances.