Whether you’re a seasoned certified financial planner, an heir to an enormous estate, a famous rock star, or just a young adult trying to figure out your place in this world, you can rest assured that WE ALL need to learn how to stay abreast of our finances. It can be easy to lose in a minute what you’ve worked for your entire life by making poor decisions; and we don’t want you to be one of those people. That’s why this blog is dedicated to sharing a few important financial tips.
We realize that “managing money” may sound like a daunting task but it really doesn’t take a brain surgeon or rocket scientist to take the necessary steps to keep your finances in line. Check out these tips on how to live a comfortable and prosperous life. Feel free to chime with your own tip and tricks you’ve learned over the years!
This is so important! It’s easy to spend money, and often times we find ourselves on track to spend more money than we actually have. Using the credit card has become a way of life for so many individuals and, unfortunately, we are charging more items than we can pay for when the bill arrives in the mail. Don’t let your desire to want everything you see control your life. This is a sure way to dig a financial hole that can be difficult to escape. Instead, wait until you have the cash in hand before making the purchase. And to make yourself feel even better, save up the money for the items that you want by using a savings account! This will make it easier to leave that money alone while you save. You’ll be surprised to see how much you can actually put away in a short amount of time.
- Set Priorities
Take time to figure out what you want to do with the money you earn. Should you invest in stocks, property, or a side business? Should you save it? It’s totally up to you what to do with your money and it’s easier and more exciting when you realize that you have a goal (or many goals) that you would like to achieve. Instead of living in the moment and throwing money into the wind, make a wise decision and stick with your plan.
- Know Where Your Money Goes
Do you know where your cash is going? If you manage it yourself (and you should), then you should know where every penny is going. Being aware of how you are spending your paychecks is incredibly important when attempting to stay on top of your finances and prepare for the future. Bottom line – don’t spend more than you make!
- Check Your Interest Rate
All this talk about not spending more than you have isn’t always possible and we realize that. Many, many people have credit cards, and that’s OK. When opening a card OR when deciding what to pay off first, check the interest rates. The cards with the highest rates should be paid off first! No questions asked.
When opening a Savings Account, once again, check the interest rates. The higher the interest rate, the more cash you will earn for literally doing nothing other than having your money sit in the account.
- Maintain an Emergency Fund
Emergencies happen. They just do – and the faster you accept that you need to put a portion of your paycheck aside into this emergency fund, the more likely you are to stay in line with your finances (depending on the emergency, of course.) We’re not suggesting a huge portion, but something is better than nothing. And be consistent about it. You may have a large electricity bill during the summer months or you may have to replace your tires unexpectedly. If you have kids, then you know that emergencies can happen more often than you’d like… and the same goes for our fur-babies, too. So if you don’t have an emergency fund, start one today! You won’t regret it.
- Retirement is Now!
Ok maybe it’s not right NOW…but if you’re lucky enough to live long enough, then you’ll enter “retirement age” at some point. And when you’re retired, you’re not working. No work, no income (or maybe a very minimal one.) So you’ll need to put aside another portion of your paycheck for when you’re no longer working, because, as we know all too well, you need money to live. Some of our employers offer 401K accounts where they will match your contribution up to a certain percentage. This is a great perk for any job and should be discussed in detail before accepting any new positions. So even though “retirement” sounds like it’s light years away, it’s actually right around the corner…because remember, time flies when you’re having fun!
- Don’t Forget the Taxes…
It’s easy to look at your salary and think that’s what you’re actually taking home…but the sad reality is, it’s not. We are all responsible for paying our taxes – which isn’t such a bad thing because the government has to get money some way – just remember to factor this in when determining your life style. If your salary is $35,000, you’re probably bringing in 2/3 of that, depending on your state’s tax regulations. So if you’re purchasing a home, or any other large item, make sure you understand that you won’t have your full salary there to make these payments. Instead, run your budget calculations based on your net income (or income after taxes and other deductions are removed.)
- Place a Value on Money
It’s easy to think that money is just money is just money…and no doubt, money is money. BUT money = time. Your time! You work every day to make money and then you spend that money on the items that you want or need. It may take you 10 days’ worth of work to purchase that TV you’ve had your eye on. Is it worth it to you? It’s fine if it is, just remember that you’re exchanging your TIME to pay for the items that you purchase. Is this what you want to spend your time on? Remember that.
What advice do you have? There are so many financial tips out there and knowledge is power, so we encourage you to spread the word amongst your family and friends. When you receive advice from which you think others may benefit, share it! After all, we ALL want more money!