Put these smart money tips into practice and watch your wealth grow.
If you’re just beginning to get in financial shape, give yourself a pat on the back! Starting is half the battle. There are a million things you can do to improve now, but you might not know where to begin. That’s why we’ve come up with these five smart money tips that will help you get into the best financial shape of your life.
Consider the following five financial focal points to make strides toward financial fitness.
If you’ve already started improving your finances, that’s great too! You can use these tips to strengthen your regimen.
1. Track Your Expenses
You’ve wanted to do this for a long time – get rid of that feeling and make right now the time you finally do it.
While it may seem tedious, listing your expenses over the course of at least two or three months can help you to get an accurate look at your true financial picture. Best of all, smartphone apps make it easier than ever to accomplish this.
2. Create a Budget
Once you’ve become aware of the true picture of your outflow of cash, it’s time to make a budget you can live with. The 20-30-50 plan is a fun and flexible way to account for your spending. With this plan you can still go on that much-deserved splurge while keeping your money in check. First, you should calculate the amount you have to budget every month – your paycheck (minus taxes), plus any other income.
The 20 is 20 percent of your monthly spending. Allot this towards paying your future self. Invest it in improving yourself financially – start an emergency fund, pay off your debts, and open an investment account – and you’ll be thanking yourself for your whole life.
30 percent of your budget can go towards (reasonably) splurging. Think of this as your handbag fund. As long as you account for the rest, you can treat yourself with this portion.
Then, spend 50 percent on essentials. This is non-negotiable, because it’s what keeps the lights on. Your heating bills and basic food count as needs; a new Jacuzzi or an evening at a Michelin Star restaurant do not.
3. Automate Your Savings
With the development of improved security measures for Internet banking and other transactions, it’s easier than ever to stay on track with saving money and paying bills on time. Make this the year you automate as many transactions as possible.
Set up recurring electronic payments for monthly bills and savings deposits. That way, you save without even thinking about it! As an added bonus, you’ll be helping mother earth by reducing or eliminating the need for paper checks and statements.
4. Focus on Retirement
No matter your age, it’s never too early (or too late) to focus on your retirement. It might seem far, far, away – but by starting now you can take baby steps instead of climbing a mountain later in life. Consider starting with a Roth IRA now. It will allow your money to grow tax-free year after year for retirement. Even a few dollars from each paycheck will make a huge difference.
If you already started, take the time to ensure you’re on track with your retirement savings goals. If you work for a company, examine your current 401(k) allotment and increase that amount if your budget allows. If you’re self-employed, you can open up a Solo 401(k) or a Roth IRA. Schedule automatic contributions so that you can focus on what you do best – running your amazing business. Don’t hesitate to meet with a financial planner to find out your best options for retirement planning.
5. Spend on yourself
Invest in yourself – it’s the gift that actually keeps on giving. Self-improvement is a style that never goes out of fashion.
Want a new job? Get that new dress and look your best for an interview. Want to become a computer expert? Sign up for a coding class today. Anything that benefits your dreams and goals is worth the money, because you’re priceless.
Improve even further
If you want more ways to improve yourself financially, keep coming back to Love The Hustle and get smart money tips from the Tribe. And if you’re using some tips that weren’t listed here, share them with us!
