Denice R. Preston
Our website has shared daily financial tips in honor of Financial Literacy Month. Each end is simple and easy to implement. Our 30 financial recommendations are summarized here for Financial Literacy Month.
Setup autopay for recurring payments.
Stop wasting money on late charges. Set up your bills to autopay, and you’ll never have to pay a late fee again.
Even small reductions in expenditure can add up to significant savings over time.
One small change per day can significantly impact the amount you can save. Many people use the simple example of making coffee at home rather than buying it. Making coffee costs $0.50 daily but $2.50 if you buy it. You could save $2.00 per day if you switched. You could save $730 more over a year by making this simple switch. If you had invested the money with a return of 7% per year, you could have saved more than $10,000 in a decade. This is a massive saving for such a small change.
Do not connect your savings and checking accounts.
When I meet clients, many use their savings accounts as an extension to their checking accounts rather than actual savings accounts. You must refrain from frequently withdrawing from your savings account if you are trying to save for a longer-term goal. It’s sometimes as simple as making the transfer process between two accounts more difficult.
Create a budget and revise it if necessary.
Many people hate Budgeting. So, life changes even if you make a budget and stick to it. Your income will fluctuate. Your expenses will also change. You should adjust your budget to continue to achieve your long-term goal.
Contribute automatically to your savings account with every paycheck.
You’ve probably heard that it is important to pay yourself first. You can do this by setting up automatic deposits from your paycheck to your savings account. You want to save the money you have left over after saving.
If your employer doesn’t offer a retirement program, you can open an IRA and contribute today.
I’ve mentioned this in an earlier tip, but it’s so rare that it’s worth repeating. Don’t let the fact that your employer doesn’t offer a retirement program or you don’t qualify to join it be an excuse for not saving money for retirement. Open an IRA today to start contributing. You can open an IRA at discount brokers, local banks, or financial advisors.
You don’t need much cash to begin investing.
Acorns is a new investment platform. You can start investing literally with spare change. There are many ways to begin investing without having a large nest egg.
Savings for retirement are easier to do if you begin earlier.
It is better to invest over time than try and time the market. Dollar-cost averaging can help you build wealth and enjoy a comfortable retirement. You want to be working only for a while, do you? If you don’t start early, you may need to work longer to compensate for your retirement savings.
Track your expenditure.
If you don’t pay attention, spending more than you should is easy. It is essential to keep track of your spending. You can use a simple piece of paper in your wallet or purse or a computer program, like the one I use for my clients. Tracking your spending, however you choose, will help you reach your larger goals faster.
Be a valuable employee and ask for an increase.
Many people focus on cutting back on their spending to boost their savings. However, increasing income has a more significant impact. Find out what projects or responsibilities can be taken on if it’s been a while since you requested a raise. You can impress your boss by demonstrating your abilities. Then, you’ll have clear proof that you deserve to be given a raise.
Have a partner who is accountable for your finances.
You may need to be tough on yourself to stay on track and reach your goals. A financial accountability partner may help. I am an accountability partner to many people in my professional life. Your partner doesn’t have to be experienced. You could choose a spouse or a friend. Choose someone you can trust and who has your best interests at heart.
Wait to store your credit card details online.
By saving your credit card details on your favorite shopping websites, you make spending too easy without thinking. You can make it so that you must take an extra step to get the card from your wallet. This simple step could be enough to prevent mindless purchases.
Make sure you have the right insurance in place.
It is essential to ensure you are covered by the right insurance policy, regardless of how much money you have. It is necessary not to be over- or underinsured. You should also review your coverage yearly, as your needs can change. This is the perfect time to review your coverage since you will check it during open enrollment.
Balance your portfolio at least one time per year.
Your time horizon and goal determine your initial investment allocation. It also depends on how much volatility you can tolerate. In a single year, a lot can occur. Life changes could occur. Your goals may change. Different areas of the markets will perform better or worse than others. It will help if you rebalance the portfolio at least once a year. Otherwise, it will not suit your goals, time frame, or risk tolerance.
Create a plan to achieve your long-term objectives.
Antoine de Saint-Exupery once said: “A goal without a strategy is just a dream.” It is essential to write down your goals and plans for achieving them. Although it’s not in stone and can be changed, writing down your goals will increase your commitment.
I hope that you found some of these tips helpful. Please share any suggestions you may have in the comments. We can all benefit from one another.
Contact us for a free consultation if you need help creating a financial plan. We are located in Ohio but work with clients all over the country.
