Kickoff 2019 on the right Financial Foot
Money is a critical part of our lives and often what many of our goals revolve around. Take a look at some tips I have as 2019 begins to perhaps help set you up for a successful year financially.
I know they say money can’t buy happiness, but have you seen a financially secure individual truly unhappy? To be clear, when I say “financially secure”, I don’t mean insanely rich. Simply put, financially secure could mean that they have an emergency fund established, carry little to no consumer debt, are free from student loans, and earn a steady paycheck – no matter what their career is. Many Americans, unfortunately, struggle to get to this point for one reason or another. Whether you’re struggling or not, or just getting started with improving your finances, some fresh perspectives on commonly mentioned tips may be helpful – and that’s why I’m here today.
Over the years, I’ve obsessed about money and credit for a number of reasons. That doesn’t mean I haven’t made bad choices, but surely I’ve come to incorporate a handful of good habits into my financial life. Here is a list of 5 things I’ve done over the years to improve my finances! Let me know in the comments if you’ve given any a try and, if you have any other ideas, I’d love to hear them!
Pay yourself first!
Money you don’t see is money you’re less likely to spend. Period. By paying yourself first, and starting this habit early in your financial life, you can not only build your savings, but you can help curb lifestyle inflation. The ideal scenario here is to have the money siphoned directly from your paycheck, such as how 401k contributions or employee stock purchase programs work, but anything is better than nothing. No 401k or ESP? No worries, set up a recurring transfer so that on pay day money is transferred right to your savings account, IRA, or other investment account. This whole notion of paying yourself first and having recurring transfers brings me to number two…
Automate all the things!
- Got bills? Automate them!
- Need to save an emergency fund? Automate it!
- Want to retire early? Automate. That. Shit.
I think it goes without saying, but really, technology and automation are your friend when it comes to making things simpler. Bills are everyone’s arch enemy, from utility bills to student loans, it seems everyone has to pay someone for something on a recurring basis, so why not automate it? Whether you use your biller’s system, your bank’s bill pay center, or an app like Prism, find something that works for you and set it up! Seriously, life happens, and you definitely do not want any late payments on your credit report if you can avoid it. Most banks even provide automatic savings plans or recurring transfers, so again and like I said previously, move your money and save it automatically – the less thought you need to put into it, the better!
Refinance your debt!
Cash flow is everything, and without having a surplus after you pay your bills for the month, it can be hard to achieve your goals. Whether you have private student loans or a car loan, if you have good credit and are currently paying over 10% interest, you should really consider refinancing. The amount of money you can save per month by reducing your interest rate is mind boggling – not only can it reduce your overall monthly expense, but it will also reduce the total cost (interest) of the loan.
Now, I don’t recommend refinancing without doing any math first, there are some scenarios where you could end up paying more over a longer period of time by “resetting” the clock on your loan, but here’s a handy-dandy calculator for you to check out!
Invest!
Sure, investing can be scary, but so many Americans leave money on the table by not investing or diversifying their money. There’s no need to go out and buy individual equities in your favorite companies, but I won’t tell you not to, either. Individual company stocks provide great benefits such as capital appreciation and dividends, but ETFs and Index Funds can also do the same.
If you are fortunate enough to work for a company that provides a 401k, how do you know you’re invested in the right funds? Target date funds aren’t all their chocked up to be, so you may want to explore other options. This can be pretty research intensive though, so personally, I decided to hire Blooom to do this for me; they make sure my 401k portfolio is set to the right risk tolerance, and rebalance as necessary!
If you want to get started with investing, check out some of these great options as well – you can specify your tolerance for risk, set up recurring investments, and they’ll take care of the rest!
- Acorns – sign up and get $5!
- Betterment – get 90 days free!
and last but not least…
Write things down!
It seems trivial and old school given the world we live in today, but sometimes just writing things down can go a long way. Sure, apps on your phone are helpful, but nothing helps visualize your money more than pen on paper.
- Have a goal? Write it down!
- Bills to pay? Write them down!
Chances are, you always have a way of working it out with math, and there’s no better approach than writing it down. Super simple, but super effective.
Anyways, if you made it this far, thank you as always! Let me know your thoughts in the comments below!
Disclaimer: I do not provide personal investment advice and I am not a qualified licensed investment advisor. I am merely sharing my thoughts and experiences with the world to perhaps make an impact on another one’s life or get them to think about their money differently.