Handling your personal finances responsibly doesn't always need to be a complex slog. While you could spend many hours setting up your estate plan or developing the ideal asset protection strategy, sometimes you just want to focus on the easier steps first. An often overlooked step is finding out what works for you.
For those who are making their financial journey one small step at a time, here's our short list of tips to help you make simple yet impactful changes.
Keep A Close Eye On Your Credit
Despite the abundant availability of free credit monitoring and credit score checking programs, many individuals still neglect to keep an eye on the state of their credit. Monitoring your credit offers a good glimpse at how you're doing financially and can tip you off to where you are failing, such as high credit utilization ratios. If you treat your credit like a close friend and see it often, you'll be more likely to exercise caution with decision-making when compared with a blissful ignorance approach.
Got A Raise? Pay Yourself First
The common saying pay yourself first needs to apply whether you get a small raise or a large windfall. It is easy to consider your little increase in income simply a bump in recreational spending power but try to spread the wealth to your savings if at all possible. You'll simply reach your goals faster and have much more of a safety buffer in case something goes wrong. Saving more than you expected for your sound financial planning strategy will only improve the outcome and your future retired self will be thanking you later.
Do What Works For You
Each and every one of us probably knows some simple actions that can help us spend less and make better financial choices. For example, some people keep their available budget only in cash every single time. This removes the mindless spending made easy by simply swiping a card without thought. If you have to slowly watch the stack of bills in your hand shrink for every purchase you make, you might be much more inclined to ignore that fast food restaurant on the way home. Figure out what personally works for you and use it, no matter how silly it may seem.
Save Now And Budget It
The most important step you can make for building a healthy savings is to start saving today. Not tomorrow or six months from now when the car is paid off, but today. Financial planning is not creating a plan you don't plan to start. A secure financial future requires steps in the present, and the longer you push off your start date the further behind you can become. Also, you should try to avoid falling into the trap of deciding to save whatever is left over at the end of the month's spending. Chances are there will never be anything left over. Considering making contributions to your savings a part of your budget with the same importance as any other household bill instead of trying to find something to save after recreational spending.
Make Mistakes Harder To Make
Along with doing what works for you, strive to make poor decisions more difficult to make. One way is to keep your savings account at a completely different bank or financial institution than your checking account. Avoid the lure of quick and easy transfers and never carry the debit card on you or in your wallet. Do the same with credit cards, avoid carrying them to eliminate any unplanned purchases. Use everything to your advantage to make spending money you shouldn't a real pain.
Financial planning can be very hard for the average person, especially if you are just starting out and trying to change your bad habits one at a time. Taking baby steps can help prevent you from becoming overwhelmed and giving up. Simple, easy to remember tips will always fare better than a mile-long list of dos and don'ts or an extensive 12-page plan. If you are looking for a financial advisor who will help you craft a plan around your unique needs to better prepare for your future, contact our team at BD Financial Concepts today.
Advisory services offered through J.W. Cole Advisors, Inc. (JWCA) JWCA and BD Financial Concepts, Inc. are unaffiliated entities.
We are a professional financial services firm located in Sanford, Central Florida.