If you’re reading this, you still have a future. The good and the bad of that is we get to choose our future. We live busy lifestyles and often don’t think about our finances until there’s a crisis or retirement looming over the hill.
With women generally managing the household incomes and outgo, it makes sense to educate our investments for the present and the future. Planning well is simple math: increase your income, decrease your outgo, and pay yourself first.
Here are a few tips to boost your management expertise.
Automatic Deposits: Not everyone likes banking online, but for most of us if the paycheck isn’t in our wallets, we won’t spend it. Set up a monthly budget, listing due dates beside each bill in order to establish when each one needs to be paid. Have your paycheck automatically sent to your savings account. Schedule your bill pays prior to receiving your paycheck (set the actual paid date for after your deposit) then when your paycheck hits the bank, move the needed money to the checking account. Leave the excess in savings to use for the next set of bills. Even if your excess is only $10, slowly over time, you’ll build months of living expenses ahead. Remember, no matter what the bills are, you put something in savings first, consider it gone. This will be your emergency fund.
Annual Planning: It helps to have an annual calendar to use like a spreadsheet. Write on each month the bills that are due and marking the ones that come in quarterly, annually, etc. This way you can mark off each bill as you pay it, and plan for the not so regular ones. The thrill of marking off each bill every month can become the catalysts to pay them off more aggressively.
Pay off Credit Cards first: I know there’s a school of thought out there that says to pay off high-interest credit cards first, however, there’s a second school of thought that I subscribe to: list your bills in order of greatest to least pay off the least first. This builds a momentum and excitement that feels like progress. Here’s how, pay the minimum payment on all of the cards, and then make a larger payment on the smallest one. Doing this every month allows you to pay off one, and the money you’ve been paying on it + the minimum goes to the next bill.
Another game I play with our bills is that I love to pay it down to the next breaking number. For instance, if I owe $743, and the minimum payment is $25, I will pay $44 to break under the $700. It feels somehow like I’m beating the system.
Find hidden money: Taking the time to go over every dollar allocated in your household may help you discover hidden dollars. For instance, while going over our phone bill, we found there was a service we never used that cost us $4.43 a month. That’s a saving of $53.16 a year. I also found buying a mocha I was spending $5 a day ($4.25 + tip) that adds up to $1825 a year…adding that to our student loan would pay it off in two years! I found a product in the grocery store that suited my needs that cost me $4.85 every 16 days. That’s a saving of $1713.45! If you look carefully, you’ll find the buried gold!
Check your retirement accounts: Are you missing opportunities to build your 401K or investments? It’s worth a trip and the time to spend a couple hours with a financial planner that understands your goals. Being completely transparent helps them and you understand where you want to be at retirement, and where you are currently. You might discover there’s a bigger gap than you thought. You’ll also need to assess your risk, and build a good relationship with your advisor in order to place your future money where you want it to be.
Check out investment apps.: Today’s internet world has built-in investment programs, some are better than others. Find one that you’ll use on a regular basis in partnership with an advisor. Apps like Betterment, Stash, and Acorn can walk you through a risk-assessment quiz and suggest a plan that puts you on target. Be wise though, check for the costs of doing business and as with all money investment systems the rule is “If it looks too good to be true, it is.”
Start today: The biggest mistake most people make is thinking investments take great sums of money to get started so they wait. Most investments can begin with very little money and your emergency fund can start with the $5 you would spend on that mocha. Why not set an appointment today to talk with a money strategist? If I wanted to protect my eyesight, I’d go to someone who has studied it, been licensed and deals with eye problems every day. Why don’t we think the same way about our money? This is where the knowledge a Financial Planner can give you excellent money making and money protecting strategies. Start your new year off right and contact someone who can insist that your money work for you!
Want to make more, and work less? It might be time to put the power of the dollar to work for you. Educating yourself and having a knowledgeable counselor might be the first positive step to making every dollar answer to you. Start today and the first dollar you save may be the one you spend on lottery tickets!