The earlier in life you can get into the habit of making smart financial choices, the better off you’ll be later in life. However, you can start making smart money choices at any age, and it will have a positive effect on your financial goals.
If you’re ready to take control of your finances, here are some smart money moves that can set you up for financial success.
Build a Budget
One of the first financial steps to get your finances in order is to set a budget. If you don’t have strong budgeting skills, there are plenty of online tools to help you get started, so you don’t feel as overwhelmed.
Once you have a budget in place, it’s a good practice to regularly check in to make sure you’re on track toward your spending goals.
If you have a short-term goal, such as buying a new Honda for sale, you can add that expense as a line item to your budget to make it easier to reach your goal. Remember to stick to your budget, and if you happen to overspend every once in a while, don’t be too hard on yourself.
Set Up an Emergency Fund
Once you have the income, establish an emergency fund you can use to cover unexpected expenses, such as medical bills or repairs. By tapping into an emergency fund, you’ll be able to avoid taking out a hefty loan or using a credit card, which can carry hefty fees and interest charges.
A good rule of thumb is to aim to save three to six months of your salary in an emergency fund which should be able to get you through most emergencies.
Save Early for Retirement
It’s never too soon to save for retirement. The sooner you start saving, the longer your money has to grow. Check with your employer to see what retirement options they have to offer.
Some employers still offer pensions, but most offer other plans, such as a 401k, which encourage you to put away a portion of your salary, and they will often match up to a certain percentage.
Pay Down Debt
If you have existing debt, prioritize paying it off as soon as possible. If you can afford to put extra money toward your loans each month, you’ll save thousands of dollars over time. If you have too much debt, you could be seen as a credit risk to potential borrowers, so it’s always a good idea to pay down as much as possible to improve your debt-to-income ratio.
If you have several debts spread out across multiple lenders, it may be beneficial to consolidate your debt into one lender. This can give you a better interest rate and make it easier to pay each month. In addition to paying down existing debt, avoid accumulating new debt, so you don’t end up in an endless cycle of paying creditors.
Use These Tips to Work Toward a Strong Financial Future
Once you get in the habit of making smart money choices, you’ll be free from the heavy burden debt can carry. You’ll be free to save for a strong financial future and have extra income available to enjoy life.