Throughout your lifetime, you’ll likely go through several different stages that may necessitate you to manage your finances in a way that suits the specific situation you’re in. For example, if you just secured your first real career after graduating from college, your next logical financial step in life is likely to start putting money away towards a down payment on a house. Perhaps you’re getting closer to the end of your career and are starting to consider retirement, which means you’re likely going to start planning to downsize your life and prepare your finances for after you retire. No matter where you are in life, however, there are some basic financial tips you can use to help you succeed in any situation.
Have a Financial Calendar
Even if you are diligent about paying your bills on time every month, you can still benefit from having a financial calendar, which will help you keep track of expenses that come up every so often, such as quarterly taxes if you’re self-employed, property taxes if you own your own home or even annual routine home maintenance. A financial calendar can help you plan for these upcoming expenses so there aren’t any surprises or you don’t miss out on an expense because you didn’t have it written down.
Know Your Worth
Knowing your net worth is important to keep you on track with where you stand financially. Your net worth is the difference between your assets and debt and can fluctuate throughout your lifetime as you make more money, take on more bills, and accumulate more material wealth. It’s a good idea to have a good idea of your net worth at all times so you can assess what wealth you may pass on to loved ones when you’re gone.
Create Attainable Financial Goals
It can be difficult to get ahead if you try to tackle debt all at once. Instead, set attainable goals for yourself to keep you motivated and make it easier to achieve. Financial goals don’t always have to be about paying down debt, either. It’s okay to set other financial goals, such as saving up for a trip or home renovation, which requires you to put money aside. Having goals gives us something to work towards and can make budgeting your money more fun.
Keep Track of Your Credit Score
Your credit score is an important component of your financial wellness and you should have a good idea of what your score is at all times, not just when you’re about to make a big purchase. Your score shouldn’t really fluctuate that drastically from month to month, which is why keeping track of your score is important. If you notice a major change in your score, especially a negative one when you haven’t made any major purchases or debt payoffs, your identity could be compromised and someone may be using your credit information. You can check your free credit score to stay in the know about your credit and take action if something seems off.
Avoid Unnecessary Fees
Is your bank charging you a monthly fee just to have an account with them? Do you have to pay out a fee every time you make a change to your investments? Perhaps you’re paying other expenses that eat into your monthly budget, such as gym memberships you don’t use, subscriptions you haven’t taken advantage of, or cable when you don’t watch television. Examine all your spending each year to see where you’re paying extra fees and costs that could be avoided and make changes when you can, such as swapping to a bank with no fees or cutting the cord with cable.
Save Whatever you Can
You can never have too much savings, especially in accounts that are designed to be there when you need them in the future, such as your retirement account. Make sure that you have a good amount of savings by bumping up your 401k whenever you get a raise and automating a portion of your paycheck to go into a separate savings account that you don’t have easy access to. strive to have at least six months of your salary put away to help in case there’s an emergency. If you have a good portion of money in your emergency savings and your retirement account is on track, you may want to consider putting aside some extra money in investments.
You should be able to spend money on the things you enjoy, but that doesn’t mean that you should go overboard. Budget a portion of your paycheck for discretionary spending and use that money wisely. Many people are more invested in spending on experiences over things, for example, which can offer prolonged enjoyment long after the experience ends.
These suggestions can help you whether you’re just getting started with managing your finances or have been successfully managing them on your own for years. It’s always beneficial to keep learning about the different ways to help manage your finances efficiently to ensure that you are prepared for the road ahead and help set you up for future success.