Bring on the Finances!
Consider these fifteen pieces of advice if you are struggling financially, and if you are not, it is always good to have some pleasant reminders!
1. Maintain a checking and savings account.
2. Use overdraft protection.
3. Know how to make and keep a budget.
Budgeting is essential to a successful financial life. If you find yourself constantly in a position where you’re wondering where your money went, it is important to utilize the beauty of a personal finance budget. This is important for knowing where your money is going and how to use it well.
4. Know your credit score.
Credit scores might seem scary. After all, credit scores are one of the main factors that lenders look at when you’d like to get a car loan, mortgage loan or an apartment. While you shouldn’t pull your credit score every day, make it a point to know where you stand.
5. Improve your credit score.
Having a place to live is important. Having a car to drive is important. Unless you have the financial margin to pay for large items like cars and houses in cash, you will more than likely need a loan at some point in your life. Your credit score is very important because it controls a lot of what you can do.
6. Create multiple streams of income.
Even though you may have a comfortable nine to five job that pays well and comes with benefits, there is no telling what the future holds. Knowing this, it is not a good idea to live on only one income stream. Have a few side hustles while you’re young. This will help you create financial stability.
7. Create forms of passive income.
Passive income is a great way to build wealth. Passive income is when you work once or twice and then you get paid on a regular basis without putting in more work. For example, if you’re a writer, royalties from book sales are a great form of passive income.
8. Invest in stock, bonds, and/or mutual funds.
If the thought of learning about stocks, bonds, and mutual funds scares you, start with mutual funds. It is a safe way to invest in a few different avenues at once. Do it through a trusted finance company to manage your money safely and wisely. In your twenties, it is also a good idea to try one or two aggressive investment opportunities with stocks. The older you get, the less aggressive and risky your investments should be. But if you are not a risk taker, do not feel obligated to invest in a stock.
9. Take a money management course.
Whether it’s through a local community college, local church. or an online class, a money management course is excellent for helping you learn how to effectively kill debt, manage money, build wealth, and save on taxes. Taking a class like this once every other year is perfectly sufficient.
10. Actively put money into the savings account.
It’s one thing to have a savings account. It’s another thing to actually put money into the account. A great practice for building your savings involves putting 10% of each paycheck into the savings account. If you treat this 10% like a bill, you’re more likely to build up a solid savings cushion.
11. Create an emergency fund.
While it’s nice to think positively about the future, one thing is definite: you will run into a crisis or an emergency at some point in your life. Knowing this, it is very important to save for emergencies. Put away a few thousand dollars that are untouchable and are only to be used in the state of dire emergency.
12. Maintain finance goals.
Just like many people set personal fitness goals, it is good to set personal finance goals. This helps you to actively work toward achieving financial success in your personal life. Setting goals will help you stay mentally engaged and motivated to practice good money habits. Mint is an excellent tool for tracking and coordinating your financial goals.
13. Complete financial check-ups.
Financial check-ups are times when you set aside time to get an aerial view of your overall finances. This time allows you to see what’s working and what still needs work. Make it a habit of doing these check-ups on a quarterly or semi=annual basis. Don’t let a year pass without doing two.
14. Find a personal finance mentor.
Just like you’d get a mentor to help you in your professional life as you progress, the same applies to your finances. Once you’ve set your goals of where you’d like to see yourself financially, align yourself with someone who is where you’d like to be. Don’t be afraid to pick their brain and ask them questions.
15. Be transparent with yourself about your financial situation.
You should know when certain financial moves need to be completed and what your situation looks like from a clear and honest perspective. The more honest you are, the more clear you’ll be. When you’re clear about what you want, you’ll get there faster!