You have to come to terms with your finances sooner or later. It’s okay to not have all the answers. We have outlined some simple tips that will help you get ahead with your finances.
Getting Ahead of Your Finances
Tip #1 – Your Credit Cards
- Start with credit card debt.
- Pay off your credit cards.
- Get out of debt. Stay out of debt.
- After you get rid of the debt, don’t start it up again.
- Stay debt free…if you can’t afford it, don’t buy it.
- Limit the use of your credit cards.
- Only charge up to an amount that you can afford to pay off every month.
- Don’t carry a balance on your credit cards.
- Use your credit cards for emergencies only.
- Pay your bills on time…late payments are bad.
Tip #2 – Work On Your Credit Scores
- Credit scores above 750 are good credit scores
- Credit scores closer to 800 are better.
- Credit ratings at 850 are the best.
- A good credit score will get you lower interest rates on mortgages, car loans, student loans and much more.
- Find out if you need credit repair.
- If you need credit repair, don’t wait, get it, find some credit repair services.
- Credit card balances impact credit scores.
- The amount of credit you use compared to the amount you have available impacts your credit score.
- Making your credit card payments late is bad for credit scores.
Tip #3 – Update Your Retirement Accounts
- When was the last time you checked your retirement investments?
- Make sure your portfolio is diversified.
- Work with your financial adviser on your asset allocation.
- Make sure your investments are spread out among the different asset groups.
- The different asset groups include: a cash equivalent, large cap, mid cap, small cap, balanced, international.
- If you haven’t started a rebalancing program for your 401k account and IRA, set it up.
- Make sure your beneficiaries are current on all of your 401k accounts, IRA accounts, savings and investment accounts.
Tip #4 – Get Some Knowledge
- Take a college investment course.
- Subscribe to some financial magazines.
- Buy some financial books.
- Getting ahead financially helps if you personally know something about money management, stocks, investments, insurance, annuities, and basic finance.
Tip #5 – Set Your Parameters
- If you don’t have any financial goals, make them.
- You cannot move your finances forward without financial goals.
- If you start a vacation without a road map, you won’t leave the driveway; the same is true with your finances; you need a road map to get you on your way.
Tip #6 – Track Your Expenses
- You need a road map for your spending also.
- Your spending road map is a budget.
- A budget will help you keep track of where your money is going.
- To do it right, you must account for every dollar you spend.
- But you must make sure you don’t cheat; if you cheat and don’t write every expense down or don’t follow the spending limits within your budget, you won’t really know where your money is going.
- If you don’t know where the leakage is in your spending, you won’t be able to plug it up.
- Getting yourself ahead financially starts with knowing where you are spending your money.
Tip #7 – Live Below Your Means
- Don’t live on more than your paycheck can support.
- Live on your needs not your wants.
- Understand the difference between needs and wants.
- In times of economic bliss it’s easy to not worry about money; and that is the best time to have the tightest spending habits.
- In times of economic hardship you need to tighten your belt; but if you already live below your means, you won’t have to tighten your belt that much.
Tip #8 – Start a Savings Plan
- If you get a bonus or a raise, don’t spend it, save it.
- Make one of the items in your budget a savings item.
- If you budget savings as a line item, you have to meet that line item.