Being financially savvy plays a huge role in your stability. Every year I create goals which include my financial plans. These goals are S.M.A.R.T and they’re visible to me daily as a reminder. For someone like myself who loves to travel and go off on random adventures, it’s important for me to be smart about my money. Here are 8 helpful ways you can get your finances all the way together.
1. CREATE A BUDGET
Create a budget and plan your monthly expenses in advance. There are so many resources out there you can use such as Mint or LearnVest to keep track of your expenses. I prefer to use an old fashion spreadsheet template so that I can manipulate it and make financial forecasts. There are plenty templates floating around the internet. Pick one and tailor it to your needs.
2. CREATE SEPARATE ACCOUNTS
It’s so easy to spend all your money when it’s all in one place. Create separate accounts for yourself so that you won’t spend what shouldn’t be spent. I myself have an emergency and traveling account. There is no harm in having multiple accounts from different institutions. Remember to pay yourself first then allocate money towards your bills.
3. ENROLL IN A 401K OR 403B
When in you’re in your twenties, most of us don’t feel the need to put money away in a retirement account. It important to look at long-term vs short-term. The money will be automatically taken out of your check (pre-tax) and put away in a separate account. The best part about it is that it will continue to grow based on investment earnings. You also have the option to take money out when you need to. I would not recommend not doing this because you will face a tax penalty at the end of the year. This should serve as a last resort.
4. EVALUATE YOUR EXPENSES
After you create your budget it is important to start evaluating your expenses. What can you live without? Is there a cheaper option? For example, if you have cable and you’re paying $200.00 for it and you’re never home, cut it! There are so many other cheaper options you can use such as Netflix and Hulu. If you don’t want to pay for that either there are free websites you can google online to watch your favorite shows. It’s a win-win situation.
5. INVEST IN THE STOCK MARKET
On a budget? Got $5.00? No problem. An app called STASH was created to allow users to invest with as little as $5.00. You are investing in fractional shares, but it’s another great way to save. There are other ways to invest in the stock market just make sure you do your research. Most importantly, buy what you know.
6. ELIMINATE YOUR CREDIT CARD DEBT
If you have credit card debt it’s time to make a plan to get rid of it. Unfortunately, you are accumulating interest by the day. Create a pay down plan, build it into your budget and stick to it. Sacrifices will be made, but it will be worth it in the end. For high-interest rate cards, I recommend calling the credit card company and negotiating a lower rate as well as asking for an increase in your credit limit. This will help improve your credit and balance out your credit to debt ratio. This does not mean go spending because you have a larger credit line.
7. JOIN A CREDIT UNION
I’ve been a member of a credit union for over 10+ years. I must say I absolutely love it. They have low-interest rates and are more likely to work with you if you needed a small loan. A great perk about being a credit union member is that some institutions will actually give you back $5- $10 in ATM fees that you pay a month. Other perks also include discounts on several services Check it out here.
8. CHECK YOUR CREDIT SCORE
Your credit report is a record of how well you’ve paid your debts in the past. Maintaining your score can benefit you in many ways. This includes obtaining more favorable terms on loans and mortgages, receiving credit, and better rates on your auto insurance. Check your credit at least once a month. You are entitled to one free credit report every 12 months from the three main bureaus (Equifax, Experian, TransUnion). To order your credit report Click here. You also can use free tools such as Credit Karma. Download the app on your phone. It’s free.