In today’s economy, it almost seems as if nothing is a sure thing. “Job security” is a phrase that feels like a historic myth we’ll someday share with our grandchildren, and nearly everyone is on edge with their finances. While there are no guarantees in life, there certainly are things you can do to help stretch your dollar and plan for a better future.
- Contribute more to your 401k… If you are currently only contributing 3-4% of your salary to your 401k, this is the first area of your finances that needs improvement. While 3-4% will still leave you with some retirement funds, chances are that it will not be enough to live on. If you are lucky enough to have an employer that will match your contributions up to a certain percentage, you’d be silly not to contribute at that level. Just $30-40 extra dollars out of your weekly pay (the equivalent to 1.5 weeks worth of Starbuck’s trips) could be the difference between retiring on $45k a year and retiring on $100k/year.
- Pay off credit cards NOW… Credit cards can be like a vicious vortex, constantly sucking you and your credit score down to the bottomless pits of financial hell. If you’re a self proclaimed credit card addict, stop. Do yourself a favor and cut up every card you own with the exception of one that you can use in the case of an emergency. Another good tip is to make sure that you pay off your debt as soon as you have extra cash. If you receive a sizable tax return, pay off your credit cards. If you receive a sizeable bonus, pay off your credits cards. The less debt you owe the better your credit score will be which in return will lead to lower interest rates and better prices on big purchase like a house or a car.
- Save for a rainy day… Having a substantial amount of money stashed away is financial planning 101, especially in today’s economy. Most financial planners suggest that you have a minimum of one month’s salary in a savings account that you don’t touch. This way should the unthinkable happen, like you lose your job or have to buy a new roof for your house, you have some cushion to get you through versus scraping together every last dime until you’re all tapped out.
- Learn to be patient… Ask yourself truthfully, do you really need a new big screen television? Do you honestly need a new pair of shoes? Could you maybe forgo a week in the Bahamas for a long weekend close to home this year? The answer to all of these questions is usually, “YES!” While we all work hard for our money and deserve to spend it on life’s little luxuries, if your finances are not in order (meaning you have no savings and little vested in a retirement plan), you may want to hold off on unnecessary purchase until they are.
- Seek out savings… Yes, we all despise the crazy coupon lady who ties up the grocery store line with her .05 off of every purchase but honestly; she may just be onto something. It’s amazing how much money you can save by looking for deals. Whether that means clipping coupons or checking local websites for discounted specials, every little bit counts. If you can save just $45.00 a week at the grocery store, that’s nearly $2,400 a year! Just enough to pop into a savings account without even needing to adjust your budget.
So tighten up your purses ladies and put on your game faces. Let’s make this year the year that you clean up your finances and start building a portfolio that would marvel even the most conservative of accountants!