Managing your finances can be a daunting task, but it doesn’t have to be. No matter where you are in your life journey, learning to manage money and making it work for you and your future is an important skill. Here are some practical tips to help get you financially fit.
Set a realistic budget and look for ways to reduce spending. Pack a lunch and make a cup of coffee at home instead of stopping for a morning latte. A budget helps you know what you have to spend on necessities and enjoyment, and how much to save each time you get paid. But setting a budget is only the beginning; sticking to it is another matter. Tracking your spending down to the dollars and cents is easier than ever with free-to-use budgeting apps you can find in your app store. You can even categorize your transactions (e.g., food, household, entertainment, etc.) so you can see at-a-glance how your actual spending habits break down.
Make Saving A Priority
If you have trouble reducing your spending or sticking to your budget, try setting a minimum savings goal. A realistic goal is easier to maintain and helps you accumulate savings a lot faster than you’d expect. Try saving just $5 each week and by the end of the year you will have saved $270! If you increase your savings by just one dollar, it adds up to $324. Put aside small amounts throughout the year and watch your money grow. And don’t just stash cash under your mattress: Putting your money in a high-yield savings account means your money can earn even more, without any effort on your part.
Register For Automatic Transfer
Set up your bank account to move money from your paycheck into a savings account before you even know it’s gone. By setting up an automatic transfer, your cash gets saved and you aren’t tempted to spend it. Also try lowering your monthly expenses by 10% and move that cash into savings or investments. Look for savings by paying off your credit card immediately to avoid interest fees or shopping less and move that 10% from spending to long-term savings. If you want an easy way to set it and forget it, some banks even offer debit cards that round up every purchase to the nearest dollar and transfer the change into a savings account for you. It may not sound like a lot, but even your digital “spare change” can go a long way.
Investing can be intimidating. Look for a certified financial planner who can guide you to invest wisely. Learn to maximize your 401k plan with your employer, open an Individual Retirement Account (IRA) or even put money in a Certificate of Deposit account to earn interest. Credit Unions can help you learn more about IRAs, savings accounts, Certificates of Deposits and other saving products that ensure your budget and retirement goals stay aligned.
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