Here are some tips I’ve learned through the years that will have a good financial impact on your life. Feel free to do them all or 1 or 2. Just be sure to do something to get your financial life on the right track.
Spend Less Than You Make
This is common sense advice and a pillar of personal finance. If more is going out than coming in then you have a problem that needs to be fixed.
Cut out Extravagancies
Do you really need a 52 inch Hi Def TV or a Coach purse? No, you really don’t. It’s like when you’re a kid and you see something shiny you say “oooo shiny, I want that”. It’s pretty much the same thing but on a more expensive level. I promise you’ll live with out it and be much better off using that extra money to pay down your debt, put into saving, or save up for your child’s education.
Make a Budget
Just seeing where you money goes can help you realize “Wow, I spend that much money on that”. It’s a lot more eye opening when you actually see where your money’s going versus where you think your money is going.
Let Time Work for You
Compound interest is amazing. It works for you by growing over time. The more you add to it the more it will grow. So open up a retirement account a start contributing to it.
Save Your Extra Income
Whenever you receive a bonus check, a tax refund or a raise just put it into savings. Pretend like you never received it and you won’t miss it at all.
Contribute to a Roth IRA
Open up a Roth IRA today and start contributing to it. The money you contribute is after tax and any interest you earn isn’t taxed if you start taking it out after the age of 59 1/2. You are able to take out the principle amount early without penalty if you need to, but you should have an emergency fund for that.
Get Free Money from Your Employer
If your company matches your 401k contributions be sure to at least contribute up to what they match otherwise you’re losing that benefit and free money. Plus that compound interest will work here as well.
Have an Emergency Fund
This is used for emergencies only. I repeat, Emergencies only. Start with whatever you can and start contributing to it monthly so that it eventually builds up to 3-6 months of expenses. The important thing is that this makes you feel secure so that you don’t get stressed out because you hit a bump in the road of life.
It can be tiresome saving every penny so buy yourself something every now and then to give you a break. Just be sure you don’t go crazy and ruin all that you have accomplished.