Financial tips everyone should know
It can be easy for our good spending habits to get derailed if we lose track of our personal finances. That’s why we’re encouraging you to prioritize your financial wellness by incorporating the following 6 financial tips into your life so that you don’t ever break the bank.
1. Set a budget
This helps set the stage for every other goal in your life. Here’s a basic checklist for building a personal budget:
- Determine your income
- Calculate expenses
- Calculate the difference
- Determine what do with your savings
- Make budgeting a habit
Need more help? Search the web for budgeting tips and resources from credible sources. You can even find free, easy-to-use templates that can help get you on the right track
2. Create a financial calendar
If you don’t trust yourself to remember to pay your bills or regularly pull a credit report, think about setting appointment reminders for these important money to-dos in the same way that you would an annual doctor’s visit or car tune-up. Not sure where to start? You can find many examples of personal finance calendars on the web to give you some great ideas.
3. Check your interest rate
Here’s some food for thought: Which of your loans should you pay off first? The one with the highest interest rate. Which savings account should you open? The one with the best interest rate. Why does credit card debt give us such a headache? Because of its compound interest rate. The bottom line here is that interest rates are incredibly important, so make sure you’re paying attention to them. They’ll help you prioritize which debt or savings commitments you should focus on next in your life.
4. Track your net worth
Your net worth—the difference between your assets and debt—is the big-picture number that can tell you where you stand financially. Keep an eye on it, and it can help keep you aware of the progress you’re making toward your financial goals—or warn you if you’re backsliding.
5. Set specific financial goals
The key to effective financial goals is that they follow the SMART template: they’re Specific, Measurable, Achievable, Realistic and Time-bound. Use numbers and dates, not just words, to describe what you want to accomplish with your money. How much debt do you want to pay off—and when? How much do you want saved, and by what date?
6. Adopt a spending mantra
Pick out a positive phrase that acts like a mini rule of thumb for how you spend. For example, ask yourself, “Is this purchase better than visiting Bali next year?” or “I will only charge items that are $30 or more.”