It doesn’t have to be a New Year’s resolution to resolve to
improve your finances. It’s never too late to try and improve your financial
well-being. The keys are knowledge and planning. Evaluate where you are, and where
you want to be. Then come up with a plan to get there, and figure out what you
have to do to get there.
You don’t need an expert to get you started down the path to
improving your finances. Just take some basic steps to get the ball rolling,
and stick to your plan. After you know where you are and where you want to go,
then you might consider consulting a professional financial planner to help you
get there.
Plan ahead
Get started right away to plan for your future. Set short
term, medium term, and long-term goals.
Figure out your worth
Create a list of everything you own, and deduct your debt
from the total net value of your possessions. Also do the research to ensure
that you are earning the salary you should be based on your skills, experience,
job tasks, and the industry salary standard.
Spend less than you earn
When you know your net worth, work on spending less than you
earn. Cost cutting here and there can yield surprising savings.
Make a budget
Set saving and spending goals with a budget and stick to it.
Eliminate debt
Borrow only what you need, and eliminate the debt you can.
Credit card debt is your number one obstacle to meeting your financial goals.
You end up paying more for things on credit than you would if you paid with
cash.
Contribute to a retirement
plan
If your employer has a 401(k) plan and you’re not
contributing, you’re throwing money away, especially if your employer has a
contribution-matching plan. The minimum you should contribute to your 401(k) is
what your employer will match. If you don’t have access to a 401(k) or 403(b)
plan, look into an IRA.
Build your savings
Be sure to always set something aside for savings. Strive to
set aside 5%-10% of your salary before paying bills.
Build a portfolio
Build a diversified investment portfolio, based on professional advice. A diversified investment portfolio can decrease volatility and even out returns.
Review your insurance
It’s important to have the insurance you need, but maybe
people also have too much insurance. Consult a professional to review your
insurance coverage.
Create or update a will
If you have a will, take a look at it and update it. If you
don’t have one, you need to create one, especially if you have dependents. You
need to ensure that they are taken care of.
Keep accurate records
Keep all of your records organized and easy to access. You
won’t be scrambling at tax time, and you’ll have valuable information that
could save you some money.
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