Financial Literacy – Tips On Saving, Spending, And Investing

There are a lot of valuable skills and lessons we learn at school: reading and writing, arithmetic, drawing, playing instruments, and many more. But there are certain things – very important things – that school simply does not teach us. One of those things is financial literacy. Financial literacy is basically understanding how to manage your money; how much to spend, how much to save, how much to invest, and how to create a budgeting plan that works best for you. 

We asked our followers to share the best financial advice they have received or would like to share with others, and as usual, we received some amazing tips that will benefit you all in managing your money!

Following A Budgeting Ratio

Many of our followers suggested simplifying your finances by following a budgeting ratio. A budgeting ratio allows you to allocate a certain amount of your income to specific categories of expenses. For example, allocating 50% of your income to household expenses while 30% could be for personal expenses, and the remaining 20% could be in your savings. This is a great money management technique and ensures that you are always saving up some of your income. 

“Follow the 50/20/30 rule. 50% for your needs, 20% for your wants, and 30% for your savings (you can also choose a percentage for donating to charity)” – @maryamnazeer 

“50% spend, 45% save, 5% donate” – @ourworlddigital 

“50% on must-do, save 20%, invest 20%, spend 10% on wants” – @s_arabiyani

Want To Be An Entrepreneur? Research!

Entrepreneurs, especially younger ones, often neglect the financial aspect of starting their own businesses. Ambition mixed with optimism leads entrepreneurs to focus on the progress of their company and the products or services being provided by the company, but not too much attention is paid to financial planning, researching the market, and ensuring that their investment in their start-up will be returned. For any new business owner, market research is very important; you need to be aware of your target market, your competitors, and the industry you are entering so that you do not end up losing a ton of money in the process.

“If you are starting a business, do market research for cost effectiveness” – @kubra.arif.1257

Invest Your Money Wisely

Once you have some money saved up, you can always decide to invest it. You can invest your money in stocks, properties, funds, cryptocurrency, etc. Investing is a great way to slowly and steadily increase your cumulative wealth over time. You can invest in multiple places, for example, in real estate and also in businesses. This way, you can build your wealth over time because the investments you make will lead to returns in the future.

“Invest in multiple places, it will divide your losses” – @kubra.arif.1257

“Have multiple income sources and make sure to invest” – @therealhaalim 

“Save 60% of what you make, and invest it for future returns” – @hafsahsarfraz

“It’s best to invest in land properties” – @aamena_fathima

First Save, Then Spend

More often than not, we find ourselves getting very excited about a pay-check or allowance, and our first thought is about spending the money on what we want or need. Many of our followers have emphasised to us that a better way to go about this is to first save a portion of your money, and then think about what you need or want to spend the money on. Once you have saved a percentage of your income, you can go ahead and plan your expenses with the money that’s leftover and is meant for spending. 

“Don’t save from what’s left after spending, save first then spend from what’s left” – @razeenbaigmirza

“Save 30% of what you earn and forget about it. That amount adds up and really helps” – @zoya.ahmed

“Spend after you’ve saved, don’t save after you’ve spent” – @misbahhilarious2.0

“Keep aside savings first and adjust expenses within the rest” – @fatim_110

We hope these tips will help you in your financial planning and budgeting. Remember, everyone’s financial situation is different, so not everyone can follow the same advice, and that’s okay! We just want to encourage you to spend your money wisely and be conscious of your finances.