Managing money is a constant battle. We will eternally worry about how to eliminate debt, how to plan for our children’s college, and more. Therefore, when it comes to getting ahead and building good money habits, learning proper financial management is the key to success. So we are going to discuss some crucial financial tips to help you better manage money.
Financial Tips to Help You Better Manage Money
Learning by example and inspiration is one way to do this. However, if you are just an observer and not very keen on implementing good habits, you will be at a standstill. Therefore, you will only better manage money if you are:
- Centered around frugal living
- Tracking your net worth and
- Always seeking to expand your financial education no matter how successful you become
These are like the pillars of how you can better manage money. What else can you do?
- Build an emergency fund: You should make sure you have an emergency fund that can cover at least three to six months’ worth of income should an emergency occur. Saving up seven to nine months’ funds is ideal. It’s recommended that young people save at least 15 to 20 percent of their gross income so that they can live comfortably during retirement.
- Pay down debt: Come up with a plan of attack to how to pay down debt. You can either pay your debt off by smallest balance to largest balance or by largest interest rate to smallest interest rate. You need to start saving now, even if that means putting only $5 per month into a savings account. Every penny counts, and this holds true for spending, too.
- 401(k): Take advantage of 401(k) plans. It’s important that you contribute at least six percent of their salary to a 401(k) plan. Many employers will match up to 50 percent of the annual contribution. This option is tax-deferred.
- Invest: Consider a balanced approach with high and low-risk investments. High-risk investments can generate high returns, whereas low-risk investments have a smaller chance of losing money. Use technology, such as investing apps, to help you.
If you are looking for financial counseling, call ACCC today to speak with a certified counselor. Call 800-769-3571.