Money – it’s a topic that affects nearly every aspect of our lives. From paying bills to saving for the future, everyone wants to control the amount of money that goes out, and how much comes in. Here are some tips we have provided to help you along the way:
- Know Your Numbers: Take stock of your income, expenses, assets, and liabilities. How much money do you have coming in each month? What are your fixed expenses like rent or mortgage payments, utilities, and insurance premiums? What are the variable costs? Managing a budget isn’t easy, especially in this day and age, but it can help you increase your income and keep track of any extras you’re paying for (that you don’t really need). A budget will help you do that.
- Create a Budget That Works for You: Ah, the dreaded “B” word – budgeting. People put off creating a budget because they are already so squeezed. People avoid thinking about it and put off doing a budget. You don’t have to sit down and write out everything on an Excel spreadsheet; you can use financial and budgeting apps through your phone to help you manage your finances. You can automate your savings. Start by categorizing your expenses into essentials (things you need to live) and non-essentials (things you want but can live without).
- Track Your Spending: Managing a budget is key, and it can show you where you can save. Some people are cutting back to the bone, with practically nothing left over for fun. If that’s you, then you may want to think about freelancing, a part-time job, or a side hustle (like a Door Dash, UberEats, or Instacart driver). That can help you bulk up your savings. Or, if you can increase your hours at your full-time job, you can increase your skill set and (hopefully) get promoted from within the company you already work for. However, this might be difficult for people who are just starting out in the workforce, people who have been laid off, or people who are in dead-end jobs with no hope of a promotion. Bulking up your income isn’t as easy as it used to be.
- Pay Yourself First: When it comes to saving money, the old adage “pay yourself first” still rings true. Treat your savings like any other bill – anything that needs to be paid regularly and on time. Set up automatic transfers from your checking account to your savings account each month to ensure you’re consistently putting money away for the future. Whether you’re saving for a rainy day, a big purchase, or retirement, make saving a priority for long-term financial success.
- Manage Your Debt Wisely: Debt can be a double-edged sword – it can be a helpful tool for achieving your goals, but it can also weigh you down if not managed properly. There’s “good” debt, like school debt, and “bad” debt, like credit card debt. However, in this day and age, people are relying on credit cards to cover the basics, like rent, gas, and food. While that’s a concern, it’s still best to cut down on using your credit card for extraneous purchases that you don’t need.
- Build an Emergency Fund: This one is particularly difficult in this day and age, but try to sock some money away into an emergency fund. Unfortunately, layoffs are becoming more and more common, and as a result, the shakiness of the economy might lead to detrimental effects on your physical and mental health. The instability of the economy can lead to health issues, which is why, in the event of a health scare, you’ll most likely need an emergency fund. It doesn’t have to have three to six months of your income (that is very difficult to pull off), but it should have something. Even a small $50-$100 a month would help.
- Estate Planning: While focusing on budgeting, saving, and investing, don’t overlook the crucial role of estate planning in your financial strategy. Estate planning is not just a task for the wealthy; it’s a vital step for anyone wanting to ensure their assets are distributed according to their wishes. By clearly outlining how you want your financial and physical assets handled after your passing, you prevent potential legal disputes and financial strain on your loved ones. It’s about taking control of the future of your finances, ensuring that your hard-earned money and property are managed and passed on in a manner that reflects your desires. Estate planning is a testament to thoughtful financial management, safeguarding not just your legacy, but also the well-being of those you care about.
- Invest in Your Future: Saving is important, but investing is where the magic happens. Are you saving for retirement? Paying for a down payment on a house? Paying for your children’s education? Any of those goals are best achieved by investing wisely in stocks. This, of course, depends on your appetite for risk and how much you’re willing to possibly lose (or gain).
Hopefully this will help ease your journey to financial freedom.
