I’m digging personal finance… I know, exciting, right? But it’s true! Having a good grasp on your finances and your financial goals is one of the best things you can do for yourself and for your family. If I were to hit the reset button on my career, being a certified Financial Advisor would definitely be a strong contender.
I won’t bore you to tears if this isn’t your thing, but hopefully one or more of these bullet points will be intrigue you enough to check into it further.
- MINT.COM First things first, you need to know where your money is currently, where it’s going to monthly, and where you want your money to take you in the future. So a few things… If you don’t have a good handle on this currently, it’s good to understand where your money is currently going so you can recognize behaviors (both good and bad) and make adjustments accordingly. To me, this can be achieved with the help of an online tool like Mint.com. This is a FREE service that you tie your bank accounts to. It pulls the transactions you make and you put each into a category. After a while Mint learns your categories, so after a period of time the categories will default and you’ll only have to monitor that they are correct. With this program you can do a whole bunch of things:
- Create a monthly budget. The transactions will automatically go into these budget categories so you can keep tabs on whether you’re on track for the month and make adjustments.
- Pay bills. You can pay bills right from this program.
- Keep track of all your accounts. This doesn’t just keep track of your checking account, you can put savings, investment accounts, loans, state 529’s, etc.. It’s a one-stop shop to see your net worth.
- Savings goals. You can put savings goals into your budget as well to keep visual motivation. I always say, pay yourself first. This is your savings.
- They have an app! Makes it even easier to track your spending on the go.
- Use a check register. Every time. Either a digital one or an old-school paper one. Overdraft fees are easily avoidable if you plan and know exactly what’s going in and out of your account and when. If you need help with this, their are Microsoft Excel templates that you can access for free.
- Have savings accounts for your annual and bi-annual bills, such as property taxes, insurance premiums, etc… For easy math, let’s say you have a $1200 bill that hits once a year. Instead of scrambling to pay that each year when you know its coming, set up a separate savings account and put $100/mn aside for this bill. Set up as many savings accounts for this scenario as you need. They are free and may even pay you interest!
- Check your credit report. This is the most important 3-digit number you can have.
- Have an 8-month emergency fund. No one plans to lose their job, or get sick, or run into a financial emergency. Having a nest egg will give you the security you need to tackle these types of life-situations. So going back to bullet number one, take all your monthly expenses, absolutely everything (and be sure to include the monthly amount those annual bills too!) and times that by 8. I know it seems like a lot, but have that money in the bank and do not touch it. Under any circumstances other than an emergency. Also, put it in a high yield savings account to make sure you’re getting something in return for giving a bank your money. This fund should not be in an investment account.
- Use credit cards to get the perks! If you’re responsible with credit cards and can pay them off in full every month, you might as well get some perks or rewards for your trouble. The credit card companies make a percentage of every transaction from the vendor your purchased from, so even though you’re not paying interest, they are making money off you. Get something in return! Use NERDWALLET.COM to compare credit cards and perks to make sure you’re choosing the right one, whether its travel rewards or cash back, whatever you value more. Then use it for EVERYTHING you possibly can, and pay it off in full each month.
- Play the stock market. If you’re not into this or find it too nerve-wracking (like me!) use a service like Wealthfront.com which manages it for you. They’ll even invest the first $15,000 with no management or transaction fees. Again, this should be money you plan on investing long-term and won’t need in the near-future. You need time to weather the ups and downs of the market.
- Suze Orman. I’m sure you’ve heard of her before, she’s the financial guru you’ve seen on TV. Love her. Buy her books or check them out from the library. Go to her website and use her free financial tools. She’s my soulmate.
- Jean Chatsky. She has a podcast called Her Money, which is a weekly show about the importance of personal finance, especially amongst women. It’s great and can answer a lot of guidance-type questions you may be struggling with. Check out her website, too.
- Talk to your partner about money. Amongst couples, I’m always surprised to hear that money is either a huge hot-topic or a non-topic. Both aren’t good, but at least the former is talking about it. You should be on the same page with your partner about money, how its spent and what your goals are. Pay your bills together, sit down and talk about it at least twice a month, be a true partner to your parter and ask for the same in return.
Ok, I have a TON more to share, but don’t get me started. I could talk about this stuff all day!
Hopefully this at least got you thinking about a few things or at least motivated to ta
ke the first step. Enjoy!
Btw, my caffeine of choice this week is Bones Coffee Co. – Salted Caramel. Yum!