1. Pick a starting point

It can be difficult to plan how to get from where you are now to where you want to be in retirement if you don't know exactly where you stand financially. Because of this, it's important to decide where to begin.

Using your net worth, you can measure your current financial health and your progress over time. Your net worth is determined by the difference between your assets and liabilities. You can either use it as a wake-up call or as confirmation that you are on track.

1. Identify your priorities

Making a list of what you need and what you want can help you prioritize your finances. Food, shelter, clothing, healthcare, and transportation are essential for survival. In contrast, wants are things you'd like to have but aren't essential.

Achieving financial wellness begins with understanding the difference between the two, and being mindful of it when making spending choices. If you want to clearly define where your money should go, you'll need to rank your needs as well as your wants. Both your current expenses and your goals can fall into the category of wants and needs. A tropical vacation is a want while saving for retirement is a need.

1. Keep a record of your spending

The majority of people know how much money they make each year. Even fewer could explain how and where they spent their money. Budgeting or creating a personal spending plan is a great way to figure out your cash flow.

Creating a budget forces, you to record your income and expenses, which can prove to be an indispensable tool for meeting financial obligations. In addition, a budget can surprisingly reveal your spending habits. The amount of money people spend on unnecessary goods and services often surprises them.

Debt Reduction

A mortgage, auto loan, credit card, medical bill, student loan, and the like are all examples of debt, and some of that debt may even be beneficial. As a rule, debt is bad, and not just the interest and fees that make living with debt so costly, but also the fact that it prevents people from ever getting ahead financially. As a result, it can become a financial and emotional drain on individuals and families.

Even though avoiding debt is the best strategy (by making sensible spending choices and living within your means), it's not always possible. In most cases, people cannot go to college without student loans. In case you have accumulated debt in the past, there are strategies for paying it down and getting out of it. 

1. Make sure you are financially secure

Many people adopt "I'll never retire" as a retirement plan because of dire financial circumstances - including the recent economic crisis and lockdowns. Several major flaws are present in this approach.

As a first point, retirement isn't always something you can control. Any of these situations could lead to an unexpected retirement, including losing a job you've held for decades, getting sick or injured, or caring for a loved one. Second, saying that you won't retire may just be an excuse to avoid taking the time to make a real plan-or it may indicate that you are in real trouble. Perhaps you don't know how to plan.

Securing your financial future begins with understanding your retirement options. It doesn't matter how much you can save, every little bit counts. A plan can help you make better spending decisions since you'll know what you're trying to accomplish.

Here's the bottom line

You can learn money skills even if you didn't learn them at home or in school. Become more financially literate by taking proactive steps. Now is the time to realign your focus and adjust your finances. 

How do value and growth investing differ?

Learn how growth investing differs from value investing.

Growth investing and value investing are two different types of investing. Shares of value stocks are usually available at a discount to their actual value, while growth stocks have a potential for higher revenue and earnings growth than the average stock.

Stocks are neatly categorized as growth stocks or value stocks by Wall Street. Since some stocks have both growth and value components, the truth is more complicated. Growth stocks and value stocks differ significantly, and many investors prefer one over the other.

Invest in growth stocks

A growth company prioritizes becoming a leader in its respective industries as soon as possible. Most of these types of companies concentrate on revenue growth early on, often at the expense of profitability. The focus of growth companies shifts from maximizing profits to maximizing sales after a while.

Growth-minded investors perceive a company's value to rise as those key financial metrics increase. Positive feedback can result from that. Having a rising stock price can help a company win more business by enhancing its reputation.

Growth stocks tend to be relatively expensive according to price-to-earnings ratios or price-to-book value ratios. Despite this, they are also growing faster than their peers in terms of revenue and income.