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Want to set yourself up financially–and still have fun? That’s the dream, right? To be able to spend and not worry about dipping below your bank account balance (we have all been there at one point or another). But knowing how to get there, and what to do with your money today, is a bit more complex. This is why we’re sharing a few simple money tips that can make a big difference in your financial situation, and thus have a major impact on your life.
Everyone can benefit from a little financial advice from time to time (or always). So, why not ask for a little help when you need it? When you feel overwhelmed by your finances, don’t feel intimidated to reach out to a CERTIFIED FINANCIAL PLANNER™ professional to really help you get a better handle on things. In the same way you go to someone to help you manage your body or mind (give a wave to our doctors, trainers, and therapists), you should be going to someone to help you manage your money. If you are considering a financial planner, it’s important to find someone you trust, and the first step in doing so is confirming whether he or she is a CFP® professional.
A CFP® professional can help you make a comprehensive and personalized plan that will guide you on your financial journey. But let’s start with some of the first things he or she will likely start reviewing with you in order to build your plan. Here are a few simple money tips to help you get a handle on your current financial situation, and where to go from here.
1. Understand Your Priorities
What you spend your money on should align with your priorities. Sounds simple right? But when the weekend is done, you may find you spent capital X amount shopping, dining out, and ordering drinks, and lowercase x amount on saving for the flight home for the holidays or the vacation you desperately long for. If those meals were because you value the people you dined with and the new pair of pumps you bought was because you value the job you need to wear them to, then great! But it’s important to place a value on money and understand that every swipe of your AMEX means you are saying “yes” to something and saying “no” to something else. Because whether you want to believe it or not, your funds are limited. Which brings us to…
2. Set Up An Easy To Use Budget – and Stick To It
Let’s be real, budgeting can be the bane of our existence if we let it. But, knowing where every dollar is going can also be empowering! Like we mentioned above, you are making a choice every time you spend, so why not make it a conscious one? Set a weekly, monthly, or yearly budget depending on the regularity of your income and expenses. We find a monthly budget to be the most foolproof, and we like to use Mint to easily set and track it. A CERTIFIED FINANCIAL PLANNER™ professional can also help walk you through exactly what you should be budgeting for and how much you should allocate to each category.
3. Save… and Save Some More
What’s the first thing you should budget for? SAVING. Can we say that five times over? Saving is the number one thing you can do to decrease money stress. Saving funds now means working toward future goals like a dream vacation, owning a home, or even having a cushion in case of emergency. And when emergencies can mean anything you don’t typically budget for–from your car breaking down to an injury. You need to have a “back up” fund!
The simplest way to save is to deposit a small amount of your salary into your savings account each month. You can set up an automatic transfer from your checking to your savings account, which we highly recommend doing for both your emergency fund and any foreseeable goals. If you estimate that amazing vacation in a year and a half to cost $2,000, you should set aside at least $110 a month–just for that vacation–on top of your emergency fund! Then, when the time comes to jet-set to Southeast Asia, you won’t be penny pinching for months after because you didn’t plan for that pricey flight.
Knowing what to do with your money is an ongoing process–as life changes, so does your financial situation, from your income to your priorities. It’s not one and done. So, meeting with a CERTIFIED FINANCIAL PLANNER™ professional is a great way to make sure you stay on track with your goals. They can help you manage everything from your investments to planning your timeline for buying a home, paying for college, retirement, and more.
4. Invest in Your Retirement
Haven’t you heard? By the time most of us retire, Social Security will likely look a lot different–and may not even exist–so don’t count on the government to provide you with a livable income when you’re ready to stop working. Instead, make sure you are saving (see above in all caps!) for retirement, and also investing what you are setting aside. This can make a HUGE difference. Compound interest anyone? Be sure to allocate your 401K and IRA (yes, that’s and) to specific mutual funds made up of stocks and bonds. Unsure where to open a Roth IRA or what to invest it in? This is where a CFP® professional can be extremely helpful.
5. Seek Out a CFP® Professional
Whether you need help with or have already mastered all of these money tips, it is time to . Like we mentioned before, everyone can benefit from a little advice in this department. And, most importantly you want to ensure it is coming from a voice you can trust. When working with a CFP® professional, you can rest assured the advice is sound. Why? Because CFP® professionals have completed extensive training and are held to rigorous ethical standards, ensuring they will act in your best interest when providing financial planning services. Do your research and meet with a financial planner to gauge if this is someone who understands you, your goals, and what you specifically need help with. There are plenty of CFP® professionals out there, and there is definitely one for you. So, if you’re ready to take the next step to better your financial situation, find a CFP® professional near you by visiting letsmakeaplan.org. Just think about how much your future self will thank you for putting your funds–and faith–in a trusted advisor like a CFP® professional.
What areas of your financial life are you looking for help in? Do you have any great money tips?