The idea of discussing finances frightens many people. Money is a necessity of life, If the idea of taking an honest assessment of your own financial health sends you running for the hills, it may be time to consider improving your financial fitness so you can secure your future. To get started, consider implementing these 10 basic tips.
1. Create a personal budget for yourself
Do you have a budget? If not, it’s time to make one! Having a budget is a great way to ensure you are spending the money you have available in a wise, careful manner. With a budget, you know exactly where each of your dollars is going – there is far less of a chance for any unexpected or unnecessary spending if you are using your money in a pre-planned, organized manner. Stick to your budget as closely as possible.
2. Establish an emergency fund
Everyone needs an emergency fund! You may believe that you do not have enough extra cash to stash away for emergencies, but this is untrue. Any amount you can set aside for yourself to use in an unexpected situation is valuable – whether it’s $5 or $500, having that money available when you desperately need it is always comforting and worthwhile.
3. Work toward paying off your high-interest debts first
If you have multiple debts to pay, focus on paying off the high-interest ones first. Over time, this will ensure that you’re saving money on interest fees. Ultimately, paying off a high-interest loan early will help you avoid paying lots of extra interest on your purchase, meaning you can use that money for other purposes.
4. Create shopping lists before you go to the store
Do not go shopping for anything without a plan in place first. Whether you’re shopping for groceries, new home goods, holiday gifts, or anything else, don’t walk into the store (or visit the shopping websites) without a list. Stick to the list and only buy what you planned.
5. Make deposits into your savings account automatically
Most banks have options that allow you to automatically draft set amounts of money into your savings. See if your financial institution can do this and implement it. It’s easier to save money when you don’t even realize you’re doing it – let auto-drafts help you remember to add money to your savings.
6. Live below your means
Even if you can afford some serious luxuries, try living below your means. Drive an inexpensive car, only purchase the groceries you need, and cut back on unnecessary expenses – little adjustments like these can help you save extra money for investments and emergencies.
7. Do whatever you can to receive more financial education
Sign up for finance courses, ask advisors questions, and read up on smart spending habits. Any time you have a chance to receive more financial education, take it. Everything you can learn has the power to make you a better-informed steward of your personal funds.
8. Set financial goals for yourself
Just as you’d set goals in other areas of your life, you can also set them for your finances. Whether you want to save a spare $1,000 or pay off a debt, you can set specific financial goals for yourself to help yourself become more financially fit. With goals, you have a specific direction to guide you.
9. Meet with a financial advisor
No matter how much money you have, meeting with a financial advisor can be incredibly beneficial for your financial fitness. A professional financial advisor can show you how to get the most out of your money with expert advice and clear information about savings, spending, investing, and more.
10. Put a 48-hour wait time before making a big purchase
Are you easily swayed into buying things you end up not really needing? If so, consider implementing a 48-hour wait time rule. Every time you feel tempted to swipe your card, make yourself wait two days before purchasing. At the end of the two days, ask yourself if you feel the same way about making the purchase – you’ll likely discover that the desire to buy is now gone.
