Top 10 Financial Tips – Set Yourself Up for Financial Success
From: blog.planetoffinance.com
If there is one thing that stresses almost everyone it’s money. It seems as though there are constantly bills to pay and the hours you work aren’t always turning out the way you hoped. So, what can you do? Don’t worry because financial success isn’t as elusive as you might think. In this article, we are going to look at the top 10 financial tips that will help you set yourself up for financial success.
1. Make Sure to Spend Wisely
The first thing you need to know is that you need to spend your money in a smart way. This is a tip you probably already saw coming. The most basic way to put this is to never spend more than you have. However, there is a little more to it than this.
Even if you are making enough money to have extra spending money, you don’t want to spend all of this as soon as you get it on frivolous expenses such as dinners out. Instead, you should be sure to put some of this into savings. This serves a two-fold purpose. First, it allows you to accrue money overtime which can come in handy during big future expenses such as buying a home or car. Secondly, it gives you a rainy day fund that you can dip into if you have an emergency. As such, you won’t have to rely on just the money you have on hand if something such as an emergency room visit were to crop up.
2. Start Saving for Retirement Early
When you start your first real, career-building job, you probably won’t think of your retirement right away. After all, you’re probably rather young and have decades before you retire. However, the need for retirement funds will sneak up on you.
This means that if your job offers a 401(k) plan, you should sign up immediately. If you aren’t sure what a 401(k) plan is, the concept is rather simple. As an employee, you contribute a portion of your paycheck each cycle to an account that is dedicated to your retirement fund. You can typically choose the amount that you devote to your plan each cycle. At the start of your career, you might only use a small percentage of your paycheck for this while later in your career you can move up in the amount you put in this account.
If your workplace doesn’t offer 401(k) plan, you should look into an individual retirement account or IRA. These are similar to a 401(k) plan in that you dedicate part of your paycheck to your retirement funds. The difference is that these are done individually rather than being done through your employer.
3. Budget Your Income
We noted earlier that you should spend your money responsibly and save when you can. This can be helped if you take the time to budget your money.
Budgeting your income can be rather simple or you can be very detailed in what you spend and what you save and make.
To be simple in your budget, the first thing you need to know is how much you make – typically your budget term should be about a month as this is the average billing cycle. From what you make, you need to subtract the expenses you know will occur. Expenses like rent are fixed and you can be exact in your budget. Other necessary expenses such as groceries might not be exact but you can’t count them out entirely. Instead, you should make a high estimate on those costs as you still need to make sure you have the funds for these costs. You can also budget in the amount you want to save that month.
Once you make a budget, you have to follow through and stick to it. Otherwise, you aren’t doing yourself any good by setting up budgets you won’t use.
