Tuesday, January 12, 2021
As an ongoing series in our site we emphasize fiscal responsibility and being wise with your money. We highlight some simple steps and tips to help you toward your goals. You’ll see more tips scattered throughout our site to help you manage your money and get closer to achieving your financial goals. Let’s start.
1) Identify your goal
First off a critical step is to identify your goals and what you’re trying to save for. You can’t achieve your goal and destination if you don’t know where you’re going. So have a idea, a budget and plan. You need to know if maybe you’re saving for college, trying to pay off a home mortgage, reducing credit card debt or a student loan. Do a bit of research on the terms, interest, amount of your earnings and earnings potential.
2) Begin a little at a time.
It might seem daunting if you’re trying to pay off a home or college tuition. But you have to start somewhere and today is just a good day as any. Make sure to pay your self first which means often in life despite the best laid plans that funds go to bills and other expenses, but if you can figure a way to automatically have your money go to the most essential bills and also toward your own savings and investment then try to do just that. Payroll often allows you to commit a certain portion of your money into “buckets” or certain discretionary allocations. Do a little each time regularly.
3) Make things a regular habit. As stated above many companies require direct deposit because it’s safer, trackable, and faster than a paper check. The more you automate things so you don’t have to put too much thought into it, the easier it just becomes second nature and you will be able to concentrate on other things or work or family and not have to worry about running to the bank each time to deposit a check. Some payrolls allow you to earmark your money for certain expenses which can be helpful so that your money automatically goes into a particular expense or account. Take advantage of those if you can.
4) Open up a savings account that has high yield. When I was much younger I didn’t really have any clue about money until my family encouraged me to open up a bank account as most family does when you’re first starting off. This helps you be disciplined and makes it less likely you’ll raid your money for cash. I didn’t have a bike or car as a kid so if I got paid at one of my first jobs and wanted money I had to ask family to go to the bank or walk 20 minutes to get to the bank on foot. As your needs evolve you will open different kinds of accounts and don’t be afraid to close accounts and reopen new ones.
5) Look for the best rates. As mentioned above your needs change. What served you as a starter account may n longer be useful to you. Your bank may have a higher earning large share account or better yielding bank products. Thoroughly research those and get involved. Or perhaps another bank has better rates and services. Consider moving your funds and business elsewhere to take advantage of that.
6) Split your money into different type of accounts for different purposes. Perhaps you have a regular account where all your funds go to and you have a separate account you are marking to plan for a summer vacation. Split your money up so you don’t have to reach into one account and mess up your tally of how long it may take to save up for one of your goals. This makes it so funds are more likely to remain separate and out of sight and out of mind.
7) Don’t forget that life happens and sometimes we need to plan for unexpected happenings. Perhaps you come down with an illness and you need extra money saved to treat the condition or you discover you have to make unexpected house repairs. It’s always good to save for a rainy day and plan for potential unknown events that may occur.
8) Continue to research, gather information and learn about new products and savings and investment opportunities or consult with someone about getting financial advice.
9) Keep track! If you want to reach your goals you have to keep checking. Often you see kids wanting to get taller and they keep measuring themselves in anticipation. For finance it’s a good idea to consider goals and plan weekly, month, and sometimes daily check ups. It can help you save more because it keeps the idea of saving fresh in your mind.
10) Consider using apps or financial tracking software to help make tracking easier.
11) Before investing it’s highly recommended to have several months of income saved and if you think you have enough consider doubling the amount and amount of time.
Finance doesn’t have to be difficult. With enough planning and direction you can accomplish what you set out for your financial goals and dreams.