When it comes to managing your money, you are either getting ahead or falling behind. Too many people depend on the economy to dictate their financial health, but there are ways you can amass wealth on your own as you go through life. Here are some ways to get your finances on track and add more money to your bank account.
Top Tips for Financial Growth
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1. Have a Financial Calendar
There is a lot to think about when it comes to finances. Not only do you have to worry about monitoring your income and expenses, but you also need to make sure all your payments to creditors or the IRS are made on time to avoid damaging your credit. Keeping up with your financial reminders is easier when you set up a calendar. You can either do this through a mobile app or a physical calendar you keep on your desk.
2. Stay on Top of Your Net Worth
Even if you don’t seem to be struggling with your finances, keeping track of your assets and debts each year will let you know if you are making any forward progress toward your financial goals. Your net worth is the big picture of your financial health, so staying on top of it lets you know where to make changes.
3. Check Your Payoff Plans
If you are struggling with debt or want to free up some extra cash, pay off loans or lines of credit that have the highest interest rates. Credit cards can be a depressing headache because of the compounded interest rate, so taking care of the highest interest rates (rather than the highest balances) may help you save additional funds. The interest rates will have a lot to do with establishing manageable payoff plans.
4. Craft a Budget
The way to better financial health starts with a budget. Establish your base budget on a conservative estimation of your income, rather than basing your expenditure options on overtime pay or bonus money. A budget lets you see where every dollar is going, whether it goes out or comes in. You can track where the money is spent as you reconcile your purchases against what you have coming in.
5. Conduct a Daily Assessment
A good way to make sure you know exactly what is going on with your money is to keep a close eye on your transactions. Though you may decide to do a monthly review of your finances, spending a minute each day looking at your account balance or what purchases are pending is a great way to get ahead of problems. It can also help regulate your spending habits, as you have a more critical eye towards money flow.
6. Depend on Cash
If the review of your accounts shows that you are constantly overspending, you need to break yourself of that habit. By limiting yourself to a cash-only purchase plan, you give yourself a boost in savings. You have to think twice about what you are buying and how much you can spend. After all, once the cash is gone, there may not be any more coming in until payday.
7. Try a Digital Bank
Many local branches in town could keep your money, but turning to a digital bank account is a great choice if you want to save money. With online financial organizations like Sesame Cash, the accounts offered don’t have fees associated with use. Even more exciting is the incentive program that lets you make money as you improve your credit score.
8. Balance Saving and Splurging
When you devise a budget or financial plan, there are some general principles to follow. Take 20% of your discretionary income and put it toward financial priorities. This could mean paying off debt, starting an emergency savings account, or add more funds to your retirement plan. However, it can be frustrating to save all your money and feel like life isn’t fun. It’s okay to spend some money on your lifestyle. Your financial health should influence what you spend on entertainment, eating out, or anything that doesn’t cover a necessity. However, you don’t have to stick to the 30% suggestions of many financial experts. You can always save more money and let your bank balance increase.
9. Invest Early
Building a better financial situation for yourself should be a priority, even if it means only putting $5 away each week. Compounding makes the smallest investment worthwhile. However, don’t just look at the money you are putting into savings as an investment. Your career choice, the vehicle you decide to buy, and how much of a mortgage you are paying to affect your finances. Adopt a frugal perspective early on for long-term success, remembering that every decision you make will have an impact on your financial health.
10. Develop a Goal
Aimlessly saving money is fine, but you can save more and work harder when you have a goal in mind. Set up goals for different intervals of time so that you can enjoy small victories along the way. Get your spouse, partner, or family on board to help keep you accountable. Maybe your first goal could be a destination vacation paid for in cash.
Here are 10 simple steps that can help get your finances headed in the right direction. Don’t wait for things to work out for you. Focus on where you want to go, and these tips can help get you there.