Tax season is when people typically focus on finances, but managing money wisely should be a year-round priority. Review income, expenses, savings and investments, and commit to making a few simple changes each month to improve your financial health. Here are ten tips to get started:
1. Create a plan
Put together a monthly expense report and develop a budget. Knowing where your money goes can help you set parameters for living expenses, bills, savings, and discretionary spending.
2. Automate savings
Pay yourself first! Set up an automatic transfer to your savings account after each payday. Aim to save at least six months’ salary for emergencies.
3. Consider moving
For swallowing up your paycheck, rent is the biggest culprit. Evaluate your living situation and potential cheaper options. Rent should be no more than 25-30% of your income.
4. Carry cash
You’ll be more aware of your money and less likely to spend impulsively when you’re handing over dollar bills for each purchase and not just swiping a credit or debit card.
5. Save for retirement
Contribute the maximum amount allowed to your company’s 401(k) — and make sure you receive matching funds — or set up your own retirement savings plan and make regular contributions.
6. Pay off debt
Make a plan for paying off loans and credit card balances as quickly as possible to reduce interest and improve your credit score.
7. Brush up on negotiation skills
Don’t pay more than you need to for purchases, memberships, and services. Compare prices to figure out how to get the most bang for your buck, and know when it’s time to switch vendors.
8. Set goals
To pay off debt or save for buying a home, set clear long-term goals with short-term objectives to help you stay on track.
9. Build financial literacy
Stocks, bonds, CDs, college funds, tax deductions, interest rates — there is a lot to learn about finances. Know what assets you have, where they’re located, and what your options are to be in better control of your financial future.
10. Consult an expert
Contact your EAP for financial consultation services, DIY tools and documents, and more information and resources to help you improve your finances.