You’ve probably gotten a lot of advice about money, and maybe you’ve even taken some of it. If you’re really ready to get control of your financial life, then it’s time to take a look at these personal finance tips:
Take a Financial Snapshot
Your first step is to take a good hard look at where you are today financially.
- What’s your net worth? That’s the difference between what you have and what you owe.
- How much debt do you have? Be sure you know the interest rate you’re paying on each outstanding balance. How will you pay them off?
- Where do you want to be? It’s crucial to set goals. Put everything down on paper, with dollar amounts and what it will take to accomplish them.
Create Good Habits
Next, be sure you spend time regularly paying attention to what’s going on with your money.
- Start with setting up a written budget. A good rule of thumb is to allocate at least 20% of your income toward your most urgent financial priorities, whether it’s paying down debt or saving toward a goal. And, if you use 30% as a general number for all the money you spend on things that aren’t necessities, you should be able to stay within your budget guidelines.
- Get on track for paying bills and handling other financial tasks on a regular schedule. Really, this is as simple as entering reminders into your smartphone or writing them down in your calendar.
- Remember to include quarterly taxes, personal property taxes, and other important bills that you don’t want to forget about in your alerts.
- Think about using cash only instead of credit cards. It’s hard to exceed your budget when you run out of cash, and somehow, we all seem to pay more attention when we’re parting with cash instead of using a credit or debit card.
Change Your Attitude
This is a tough one, but instead of feeling trapped or bitter because you’re on a budget and focused on your financial goals, switch up your thinking so that you’re excited about what you’re doing. Here are some ways to make it easier:
- Keep track of your wins. For example, if you were able to get a better deal for something online or you saved an extra chunk of money, celebrate that.
- Inspire yourself, whether it’s with quotes or Internet memes.
- Banish negative thoughts. You absolutely will accomplish your goals!
- Appreciate what you have instead of always wanting more material things.
- Band together with friends who are on the same page. It’s easier to keep up good habits and stay positive when you’re with people who support you.
Keep Retirement in Mind
Start saving now for retirement. It’s as simple as time and compounding interest.
Have your contributions automatically deposited into your savings vehicle.
Avoid cashing out your retirement account unless you’re in a dire, extreme situation. You’ll get hit with penalties for early withdrawal and a hefty tax bill.
Always put money toward your 401(k), whether your company matches your contributions or not. Whenever you get a raise, make sure you raise the amount of money you save toward retirement each month.
Never Give Up
Life isn’t always easy, and even with these personal finance tips, you may find yourself in a cash crunch and in need of some extra help. Just keep working toward your goals and never give up!