Finances: we all know how much they affect every aspect of our lives. But despite that, we too often wait until a major life event like a wedding, homeownership, or natural disaster to get our financial house in order.
Getting ahead of these events means taking proactive steps now.
It’s normal for beginners to need a little help with finances. That’s why we’ve assembled the following tips to help you get a handle on your monetary matters.
1. Set a Goal and Budget Accordingly
Planning your finances is like planning a journey. Before you can start, you need to know the destination.
Setting goals can help contextualize your financial plans. Anyone can set a budget, but sticking to one is much harder.
If you have a designated end-goal like saving up for a down payment on a home or launching a business, then keeping that goal in mind can help motivate you to stick to your budget.
2. Order a Credit Report
No matter how disciplined a budgeter you are, most of us eventually encounter major expenses that we can’t pay out-of-pocket.
That’s where credit comes in. Whether you’re applying for a mortgage or a small business loan, your credit score will be a major factor in how much credit will be available to you.
Knowing your credit score will help you to plan accordingly and make moves to improve it. Many services offer credit reports, and Federal legislation also requires that the three major credit bureaus make an annual credit report available to you free of charge.
3. Reduce Your Debt
Don’t be distraught if your credit has taken a few hits over the years; it happens to most of us sooner or later. Instead, start making moves to improve your score.
One of the surest ways that you can improve your score is to reduce whatever outstanding debts that you have. A good rule of thumb is to pay double whatever your monthly minimum payments are. And if you have multiple credit cards, consolidate debt onto the card with the lowest APR.
4. Establish an Emergency Fund
When getting finances in order, make sure to also set aside two-to-three months’ worth of living expenses for use during emergencies.
In tight economic times, that can be difficult to do.
One little hack that you can do to start saving is to take every $5 bill you get and set it aside somewhere. $5 is a small enough amount that you’ll barely miss it. Plus, if you handle most of your transactions in cash, you’d be surprised how quickly those bills can stack up.
5. Seeking Professional Help With Finances
Sometimes the basic techniques just aren’t getting you to where you need to be. In these cases, there’s no shame in seeking professional help.
A good financial planner can tailor solutions specific to your circumstances, and every major city has a few good ones. For example, click here to check out the top Financial Planner Nashville TN has to offer.
The First Step Is the Most Important
The longest journey begins with a single step. Well, your economic journey is one that will last for the rest of your life. To make it a rewarding one, you have to take those first steps.
As time goes by, your life situation will evolve and you’ll often find yourself seeking help with finances. So for all the tips and information you need, rely on us for the latest news and more.