We hear it all the time. We’re told we can be “business savvy” and “socially savvy,” or we can even be “savvy” in our real estate investments or our retirement planning. But do we really know what the word “savvy” means? How do we know if we have it?

Get your savvy on

Most people use the term “savvy” to indicate that someone is informed on a specific topic, to the point of being shrewd and smart on the subject. If you are “savvy,” you are considered “in the know.” You are perceived as one who has a sound understanding of the how and why of the topic at hand.

So it seems that being savvy is a good thing. Taking it a step further, or narrowing it down to a stronger focus, you could say that a savvy person has insight on a topic and sound judgment on the matter. If the subject under scrutiny is investing, the label of “savvy” is definitely a good thing.

If you’re lacking a bit in your investment savvy, don’t despair. There are a few steps you can take to up your level of savvy on the investment front.

Really Know What You’re Talking About

In business, the bottom line is king. In business, if you don’t know what you’re talking about, you are lacking in the savvy department. You’ll need to make certain you are up to speed on all the latest information and market commentary on ways to save, strategies for investing, the best sources for borrowing, how to protect your investments and when it’s best to spend some of your hard-earned funds.

Plan on planning a budget

Being financially independent is the main goal of most. If you’re going for a savvy label, you’ll need to be know all there is to know about paying off debts. That single action is fundamental to any sound investment plan. Learn how to formulate an effective budget that pays down debt instead of adding to it.

You’ll need to make certain you have a thorough understanding of credit scores and all the financial intricacies that play on the fringes of credit and lending practices. If you’re going for a savvy label, you’ll need to be able to spot actionable tidbits and strategies floating around the credit market.

Pick up all the jargon

To be considered investment savvy, you’ve got to have an encyclopedic knowledge of all matters money related. You’ll need to keep yourself up to speed on the latest acronyms and fashionable sayings. Keep an eye on real-time, up-to-the-minute financial news about personal finance and investment markets.

Know your goals when you see them

Before you start investing, you need to know where you want that investing to take you. If you’re just floating aimlessly on the rise and fall of the markets, your savvy may be called into question. Know what you want your investments to do for you and how much time you’ll have to accomplish your goals. Make sure you are specific in defining your goals and that they are realistic.

To do less is to place your savvy in jeopardy.