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How to go from Being Broke to Financially Woke

It is easy to fall into the vicious cycle of debt. Break free from this circle and be financially woke with the help of these tips.

Are you tired of relating to ‘broke memes’ on Instagram? It may have been hilarious in the beginning, but now you need to face reality and you feel the need to be financially woke. Browse through our list and tick off pointers to check if you are financially woke.

To be financially woke is to fully understand where you stand with your finances and expenditures as well as your awareness about the banking world around you: interest rates, loans and so on. Keep in mind that you are not the only one who may be broke, but you can now be financially woke.

Get organized

Have you had a look at your financial junk recently? It is vital that you are aware about your expenditures and realize how and where you cash in your money. In order to achieve financial success, you need to adopt an organizational system that can aid you to do away with unnecessary financial clutter and can bring order to your financial life. Procrastination and disorganization diminish when such a system is in place, which can even help you save for the future and create more wealth.

Budgeting provides a spending plan allows you to determine in advance whether you will have enough money to do the things you want or need to do. Budget your finances and expenditures according to your needs to avoid reckless spending and going over- budget.   

Don’t be a shopaholic

Be Financially Woke
Be Financially Woke

How I Met Your Mother fans will know that Lily is the epitome of a shopaholic. Lily shops when she is upset with herself and when she is just plainly sad. Moreover, if she comes across a good pair of shoes or a bag, she just buys it! Thus, she is in debt. Many of us relate to Lily where we can just not resist indulging in our fancies. But, it is vital that we are woke about our finances and our expenditures and thus spend cautiously. Buy according to your needs and don’t burn your pockets!

Keep yourself updated with interest rates

Interest rates strongly affect decisions that you make with regard to your finances. This is obvious in some areas: like the need for you to be woke and compare interest rates that different banks provide. Where would you rather stick in your savings? In a savings account that gives you 6% returns or 4% returns? The answer is obvious.

Moreover, being woke about current level rates and expectations of future trend in rates also can help you invest appropriately. If rates are showing a decline, you would obviously want to open a bank account with higher interest rates   

Have a Savings Account

A savings account is a basic bank account that allows you to deposit money, keep it safe and at the same time earn some interest. It functions as your emergency piggy bank, to help you in troubled times and emergencies. Say you have gone through a minor accident but have still dented your really expensive car; or you may have accidentally broken an important appliance. What are you going to do? Insurance may cover some expenses, but there still may be some horrid deductibles. This is where you being financially woke will save the day! You can use the money in your savings account to meet the incurred cost.

If the show Breaking Bad has taught us anything, it is to always be financially woke and to expect the unexpected. Now, we all are not Chemistry geniuses who can cook up drugs as a means to earn returns to save up and fund ourselves in times of unforeseeable peril. This is where you being financially woke will aid you. Another plus point of a savings account? You earn a modest interest on it. 

Secondly, a savings account helps in asset protection where say, under a circumstance you may have incurred a severe loss because where you may have, made a large investment for which you thought you would get a better return as compared to a savings account. But, this did not work well for you because of an unforeseeable emergency or problem and now, you could be in debt. This is another area where you being financially woke will definitely help you. An awareness and realization of the need to always have a backup, here, in the form of a savings account is always a plus.

To conclude, don’t be unaware- it never plays well in your favor. Keep yourself updated with what’s trending on the markets and look for opportunities to broaden your horizons. Take calculated risks and remember that you need to make your money work for you.  

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