Ask most people, and they’ll tell you they’re lousy at saving. You can change this mindset with the idea of paying yourself first. An automatic transfer that happens with every paycheck is the easiest route. It’s best to begin with a small sum. Maybe it’s $30, or $300, whatever is comfortable to you. The amount is not as important as creating the habit itself. The goal here is to build a cash reserve that you can rely on for a rainy day, or week, or month!
People frequently don’t know how much they’re spending or where their money goes. Get familiar with your online bank account statements. Keep a check register and reconcile it frequently. If you use cash, make a habit of writing down where that money goes. You’ll be surprised at how much you spend on useless things.
Take a look at your paycheck, your bills and the amount you’re saving every payday. Create a budget so that you know where you money is going every day. Allot a certain amount for each of your discretionary spending categories. When the money is gone, you’ll have to wait for the next pay period to spend more money in that category.
Once a year, you can get a free copy of your credit report. Don’t miss out on this opportunity to see what banks and lenders see. Review the report, looking for inaccuracies and out of date information.
Credit report mistakes can cost you big time and money, resulting in higher interest rates and even the inability to qualify for loans. If you spot an inaccuracy, contact the credit bureau and take steps to correct it.
If someone other than you depends on your income, you’ve got to have life insurance. Should anything ever happen to you, your loved ones will be protected. That’s enormous peace of mind in an uncertain world.
Even if it is decades away, it’s not too early to start planning. Take advantage of the company 401(k) plan, especially if your boss offers a matching contribution. Consider starting an IRA too, so that all of your financial eggs aren’t in one basket.
Many Americans are drowning in debt. Loans and credit cards are the main culprits. Debt seems like an inevitable fact, but it’s actually a choice, and something you can do without. Take steps to reduce your debt by concentrating on one card or loan at a time, putting extra money toward it each month until it’s paid off.
Taxes are notoriously complicated. Find a top notch tax accountant who can ensure you're paying the right amount and catching all the deductions to which you're entitled.
Start today by choosing one of these basic concepts to work on, tackling them one by one. Before you know it, you'll be financially fit!
Lee Reams II is the founder and CEO of ClientWhys, Inc. ClientWhys is a SAAS developer that delivers online marketing solutions to businesses built by word-of-mouth. Applications include accounting websites, email newsletters, secure client portals and tax and financial web content.
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