One of the most important steps you can take to set yourself up for financial success is to build a comprehensive financial plan (via Savology). A financial plan is more than a budget that considers your income and expenses. It also accounts for things like how much insurance you have, including life insurance and your major goals. Do you want to buy a house? If so, how much of a place do you think you will be able to afford, and when will you be able to make a down payment given your current financial habits? A financial plan will address these concerns (via Savology).
If you’re confused about getting started with a financial plan, financial advisors can help (via Savology). No matter how savvy you think that you are, you need to talk with a financial advisor if you are trying to get on track to become rich. A financial advisor will be able to help you understand the market, which is an essential measure of how your investments may or may not perform, and also the housing market (via Savology). They will help you determine either the value of your home (if you have one) or what home prices may look like in the near future.
There are many different ways to get tempted to spend more money than you have coming in. Alternatively, maybe you want to spend more money in an area than you have allotted for in your budget (via Savology). The challenge may come in the form of shoes or camping equipment on sale but that you have no budget for or risky investments that look like a great deal. Either one could be a massive pitfall because those shoes actually won’t pay for themselves, and that risky investment could very easily fail. If you are trying to get your finances together, make sure that you don’t overspend (via Savology)!
Just about every kind of account you open will have fees associated with it (via Savology). A basic checking account will have overdraft expenses that could increase $40 per infraction. A savings account can give rewards via interest, but the bank may charge you if you do not keep your balance at a certain level (via Savology). Investment funds also tend to charge fees, either monthly or yearly. Be aware of the costs associated with each account you have, and make sure you consider them as part of your budget. And whatever you do, don’t ever overdraft your account.
You’ve probably heard that you should shop around for other purchases that you want to make, whether groceries, clothing or even larger purchases, such as a home or a car (via Savology). And you can usually get a better deal on a mortgage if you shop around between lenders. Make sure that you also shop around for things like insurance, investments, and other major financial concerns (via Savology). Not all insurances and investment funds are created equal, and getting the best deal (without being cheap or skimping out on the essentials) could make all the difference in your financial success.
Suppose you owe money on anything. Then do whatever you can to pay more than the minimum amount every month (via Savology). If you owe money on your car, call the bank holding the loan to increase your payments each month. That way, you will shorten the life of the loan and pay less because of interest. Do the same thing if you have a mortgage, student loan, or other significant debt (via Savology). Also, try the debt snowball when you work aggressively towards paying off one debt. Then when that debt is paid, you apply all the money each month from that debt towards another one.
Financial experts recommend putting at least 10% of your money into savings each month, yet many people fail to do so (via Savology). They bemoan that they do not have enough money left at the end of the month to put into savings, so they neglect the most critical aspect of their financial well-being. The best solution is to pay yourself first. Immediately deposit 10% (or more) of the amount into a savings account whenever you get paid (via Savology). Remember that a savings account is not for touching; it is for growth to achieve your financial goals throughout your lifetime.