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Anyone who knows or follows me on social media knows I’m a fanatic about personal finance. Growing up in an extremely poor home, then living with upper-middle-class foster parents, living on my own with very low pay, and now living comfortably on a two-person salary has given me a unique perspective on money.

I have learned how to live with almost nothing, spend wisely, and invest in bettering my financial health. Many of you have asked me to share my knowledge about personal finance, so here are some things you should think about regarding how you spend your hard-earned money.

You Need To Have An Emergency Fund

Before you can spend on anything extra, you need to put money towards an emergency fund. Create a separate savings account that you won’t touch and put money in it whenever you can. I cannot stress enough the importance of having an emergency fund. It doesn’t matter if you’re married or single or you’re living at home or abroad, you need to have an emergency fund.

You and your partner might split up. Your parents might pass away. Your car might break down. The train might not work that day, and you’ll have to take a taxi. You might need expensive dental procedures or extra medical care that isn’t included in your basic package. You might need to fly to another city or country to go help a family member last minute. The possibilities are endless.

You can start saving money by even just putting all your extra cash or taking out cash to put into a piggy bank. Create an emergency fund and start putting money into it today. I mean it. You never know what will happen in life. You should have saved enough money to live for at least a few months without getting paid.  

You Can Only Spend Your Money Once

Let’s say you make 2.000 euros a month after taxes, and you have 200 euros left after expenses. You can either choose to put it all or part of it in savings, buy yourself a few new pairs of shoes, invest the money, or go to a hotel for a night or two. The fact is, you can only spend that money once. You only have 200 euros. You can choose to spend the extra money right now or save it (or part of it) towards something you really need or want. Try using a piggy bank. This piggy bank is transparent and even has boxes to check, so you are always reminded of what you’re saving for.

Think about what that money can go towards before you spend any of it. Decide what you want more. Instant or delayed gratification. Do you feel like you’re always waiting to have money to go on vacation, buy a new appliance, or even enough money to buy a car that won’t keep breaking down? If you have any extra money leftover at the end of the month, take part of that money and save it. Make a plan of how much you want to save per month and what you’re saving it for.

Look Into Investing

If you already have a healthy emergency fund, then start thinking about investing. Do not do this unless you have an emergency fund. I’m serious. That’s more important. So if you have extra money monthly, think about investing it into mutual funds, index funds, stocks, bonds, real estate, and more.

Make your money work for you. If you invest in the stock market and diversify your portfolio, you can make money without doing much at all. Just remember that investing is a long game. You’re not going to see a return on your investment for a while. It may take a year or more before you make any real money. So be patient.

I know investing can be quite scary; I get it. But start small. Personally, I use Vanguard, but there are so many other investing platforms out there. Call them and discuss your goals with them. I also highly advise you check you check out this fantastic financial blog I follow. I’ve learned a lot from them.

Shut Out the Haters and Stand Your Ground

A lot of people spend money because their friends or family advised them to do so. Just because something is a brand name like Gucci or Chanel doesn’t mean the items are good quality. I will never buy anything designer because I think it’s a complete waste of money. Why would I spend hundreds or thousands on some crappy plated jewelry when I can buy real gold for less?

The same thing goes for your social life. If your friends or family constantly want to go out and you can’t afford it or simply don’t want to spend your hard-earned money on that, tell them. Suggest an alternative like cooking together or only going out for a drink instead of dinner. Do not be pressured into spending money because everyone around you is doing so.

There Is So Much More to Say

So many people grow up, me included, without being taught about financial health. Knowing what to do with your money, so you’re not constantly drowning is hard. I had to learn the hard way, and thankfully my foster parents taught me some great things as well. Personal finance is something I love learning about and sharing, so I can go on and on. But you’ll probably go to another website if I do, which I totally understand. So I’ll stop here. I really appreciate you reading!

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The featured photo was taken by Valentina Brenters Photography.

What do you want to know about regarding financial health?