5 Key Signs You’re the Financially Savvy One of the Group

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There are many reasons some people are more financially savvy than others, but it usually comes down to education and effort. Nobody is born financially savvy. They become that way by learning from others, doing research and through trial and error. With time and experience comes wisdom.

Being financially savvy means you have the knowledge and experience to speak with some authority about which money decisions are wise — and which aren’t. Here are five signs that you’re the financially savvy one in your group.

You Grow Your Savings

This is one of the simplest signs you’re financially savvy, yet it’s something many people don’t do. If you’re keeping your hard earned savings in a traditional savings account, chances are you’re missing out on interest. As of March 2025, the average savings account pays just 0.41% APY, according to the FDIC.

Financially savvy people put their money into high-yield accounts instead. These accounts boast APYs of nearly 5% — here’s a link to some of the best out there.

You Avoid Unnecessary Debt

Another way to establish yourself as the financially savvy one of the group is by steering clear of debt that serves no useful purpose. One of the quickest ways people get into a deep financial hole is by maxing out their credit cards on purchases they couldn’t otherwise afford. 

Doing so leads to a vicious cycle in which you pay the minimum on your debt each month just so you can afford to pay essential bills, such as housing, utilities and groceries. This leads to additional interest and makes it even harder to climb out of debt. Financially savvy consumers know to use credit cards strategically and pay their balances in full each statement cycle.

You Put Together a Financial Plan That Works

Making a financial plan and establishing a monthly budget might be the two most important traits of financially savvy people. Your financial plan should lay out both long- and short-term items and include everything from leisure activities and investment goals to major purchases such as a house or car, according to a blog from Robert Gordon & Associates, an Illinois-based investment management firm.

Here are six steps you can take to ensure you set the right budget and stick to it.

• List all your living expenses.
• List flexible and recurring expenses and loan payments.
• Add up your after-tax income.
• Set financial goals.
• Record and track your spending.
• Adjust and review your budget for growth.

You Seek Financial Advice From the Right People

Unless you grew up surrounded by financial experts who shared their wisdom throughout your childhood and teen years, you’ll need to learn how to become financially savvy on your own. This includes not only doing your own research but also seeking the advice of financial experts who can recommend steps and investments to help you reach your goals.

You Stay on the Lookout for Other Sources of Income

Being financially savvy means you take a rounded view of your finances that includes spending and budgeting wisely as well as exploring ways to add new income streams. Financially savvy people explore different investment opportunities to diversify their holdings and ensure a steady stream of income. Investments should include a balanced mix of stocks, bonds, mutual funds, retirement accounts and exchange-traded funds.

The savviest investors also look for opportunities to invest in real estate and other businesses — but only after they’ve thoroughly vetted the opportunities.

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