Depending your situation, getting your financial life in order might seem overwhelming — even impossible. But as with many other things, the key to success is to take small bites and work on one thing at a time. Whether those small bites involve forming new habits or accomplishing certain milestones, here are 10 finance tips you need to start thinking about right now.
1. Pay Extra on Your Mortgage
During your first 3 years, almost all your monthly payment goes toward interest. You’ll make faster progress toward payoff by making extra payments during this time.
2. Don’t Overuse Credit Cards
You may have been told that credit cards can help you build a credit score and history. While this is true, you should also know that you only need one credit card transaction per month to build your score. Just be sure to pay them off on time.
3. Learn to Say No
Say no to yourself on impulse purchases or extravagant cars. Say no to your friends when they want to go out to eat or to a movie. Saying no can save you a lot of money — and possibly your sanity.
4. Learn to Cook
Learning to cook for yourself and your family can save you big time over going out or hitting the drive through on the way home from work. Come up with a handful of quick and easy thing to prepare yourself for those days when you get home late or need a quick dinner. Even using a service like CrateChef can save you money over going out, and you won’t have to do all that meal planning.
5. Understand Your Net Worth
Do you know your net worth or even how to calculate it? Tracking your net worth can give you an accurate, birds-eye view of how you’re really doing financially.
6. Automate
It’s important for everyone to know how to automate certain financial functions, such as savings, paying bills, budgeting, and retirement allocations. There are plenty of apps that can help you set everything up.
7. Have an Emergency Fund
Your emergency fund should total at least $1,000 initially (and no, Christmas shopping is not an emergency). After that, build it to at least 3 months of expenses. If something happened and you couldn’t work, or you ran across unexpected expenses, this money could literally save you.
8. Review Finances Often
Have regular budget and financial review meetings with your spouse, family, or even yourself if you’re single. review your spending and see where you might be out of line. Look at account and retirement balances. Make sure you’re following your budget. Frequent money review meetings can help you avoid arguments with your partner, too. And that’s a definite bonus.
9. Set Goals
Having a long term financial plan along with shorter-term goals that help you stay on track can go a long way to ensuring your financial stability over the long haul. How much money do you want to retire with? Do you want to save a certain amount by the time you’re 40? How much money should you save every year, and how much monthly savings will it take to get you there?
10. Stay Focused
When you’re trying to save money or just be financially smart, it’s easy for a lot of people to get burned out on the whole process. It’s not super fun to say no to expensive outings or that pair of shoes that’s calling your name. Making a budget isn’t anyone’s idea of a great time. But if you can stay focused on the goal — building wealth, savings, or financial freedom — it can be easier to stay focused on what you’re really after. (And hey, if you need a break from reality, you can still take a fun trip and save money by couch surfing instead of staying in a hotel.)
Article Links
Pay Extra on Your Mortgage: https://www.magnifymoney.com/blog/news/5-personal-finance-hacks-former-banker829460739/
Don’t Overuse Credit Cards: https://www.magnifymoney.com/blog/building-credit/6-simple-steps-to-improve-your-credit-score1106518423/
Learn to Say No: https://lifehacker.com/how-people-pleasers-can-learn-to-say-no-more-often-1524324151
Learn to Cook: https://www.buzzfeed.com/rachelysanders/cooking-on-a-budget?utm_term=.cjmpY9jeZ#.ubPJNvyD7
Understand Your Net Worth: https://wallethacks.com/how-we-track-our-net-worth/
Automate: https://www.forbes.com/sites/gingerdean/2017/12/31/5-financial-apps-that-automate-saving-money-while-you-sleep/#44e33f2a5109
Have an Emergency Fund: https://www.nerdwallet.com/blog/banking/life-build-emergency-fund/
Review Finances Often: https://www.stackingbenjamins.com/how-to-have-a-family-budget-meeting/
Set Goals: https://www.moneyguy.com/2015/10/prioritize-next-level-financial-goals/
Stay Focused: http://debtfreedivas.org/2014/10-tips-to-fend-off-frugal-fatigue/
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