October is Financial Planning Month
Do you find financial planning scary? Forty-seven percent of Americans do. And 82 percent wish they were in better control of their money. I have 5 ways you can improve your finances that you can do yourself without a financial planner. So let’s go through them.
Get Out of Credit Card Debt
Get out some paper and list your balances, fees, rates, and payment terms. Add all the balances up. That hurt didn’t it. Make it a BIG priority to pay off all your credit cards and keep them paid off. If you need some help working out a plan, read Get Out of Debt Snowball Style. Be sure to sign up for my newsletter on that page to get a printable that will help you keep track of your payoff plan and improve your finances.
Cut Monthly Expenses
List all your monthly expenses. If you are totally sure what you are spending, track it for a month. What can you cut out? Do you have an expensive takeout coffee habit? Try bringing coffee from home. Can you cut your cable package? We cut it completely and found we didn’t miss it. Call your providers for cable and internet and ask for discounts. Consider switching providers for cable/internet/mobile for better prices. Shop around every year on home and auto insurance. You may find you have been paying too much.
How much are you spending to have things done for you? Dog grooming, nails, lawn service. The more you can cut out, the more you can pay down your debt or build your savings. I save $50 a month by grooming my dog myself. That’s $600 a year. It adds up pretty fast and will improve your finances.
Get Ready for Tax Season
This one is going to be different than past years after the new tax plan passed Congress. You don’t need to save your charitable deduction slips because that deduction is gone. You may not even be able to deduct your mortgage interest. So how can you prepare?
Maximize your 401K
As soon as you qualify for your employer’s 401K program, start right away. Take advantage of your employer’s contributions — it is FREE money. If you feel you can’t afford it, start with 1% and increase it 1% every year.
If you don’t have a 401K program at work or you are self-employed, start an IRA/ROTH and put money in every month. Use a direct draft so you have no excuse to be consistent.
It’s all about compounding interest and being prepared for retirement.
Check your APY
Do you have one of those savings accounts with a 0.5% APY? Isn’t that a joke? That is where you keep your emergency fund. You are just storing it with the rates most banks have for savings accounts. Once you grow your account, you need to move it where you can grow your money. Check out http://www.bankrate.com/ for the latest rates for CDs. When you have at least 6 months living expenses squirrelled away, then consider stocks, mutual funds, and EFTs. Review these accounts every quarter to make sure you are saving strategically and not just storing your money.
Financial Planning is Year-Round
Just because October is Financial Planning Month, don’t think you should only do these things in October. You should be aware of your finances every month. Always look for ways to improve your finances. You work hard for your money so your money should work hard for you.
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