It’s never a bad time to start taking your personal finances more seriously. Smart money management habits aren’t difficult to understand, it’s sticking to your goals that can give people the most trouble. Most young adults usually aren’t taught how to understand their finances, let alone how to set themselves up for financial success—so you can be forgiven if you’re a little behind. If you want to get ahead, you’ll need to make some changes and start taking your spending seriously. Let’s go over five basic tips to help you achieve financial success.
1. Create realistic goals
It can be easier to make progress towards financial success if you break things down into a series of steps, or set modest goals you can achieve along your way. Having benchmarks to hit not only keeps you on track, but it’ll help motivate you to continue when you can see the progress you’re making. You might want to save enough for a down payment on a house, or for a year of your child’s tuition, or even for a family vacation. Whatever it is that helps you be fiscally responsible, use it.
2. Reduce your expenses
Be comprehensive and look at every area of your budget where you can save money. Seek out services that can help you do so in your local area. In Northern Ireland, MoneyGains offers consumers the unique ability to compare electricity prices and plans to ensure they’re receiving the best deal. You might not think of basic utilities as a place where you can cut costs, but savvy services like MoneyGains are making it easier than ever for consumers to take control of their expenses.
3. Make a plan for eliminating debt
There are different kinds of debt, credit card debt isn’t equivalent to having a mortgage, for example. Still, you don’t want to be tied down by any kind of significant debt if you want to be financially liberated. Credit card balances should be a high priority for being paid off. Student loans are a source of significant debt for many, and often repaying them quickly isn’t an option. The important thing is to make sure that the payments you’re making are large enough to pay off the balance you owe, not just paying the interest, or else you’ll never see progress. Managing all of your sources of debt is important, as is making a coherent plan that prioritizes “bad debt” first so you can start on the road to being debt-free.
4. Keep careful records
While we’re past the days of keeping your checkbook in order with a pen and paper, that doesn’t mean you shouldn’t be keeping financial records. Save copies of your bank statements and credit card statements. Make a spreadsheet to track your progress towards your financial goals. You’ll be more on top of your finances if you have records that you can reference and look back on. If you have a career where you’re deducting business expenses from your taxes, make sure you save your receipts to make things easier for your accountant around tax time.
5. Consult an expert
Most of us aren’t experts in finance, and even those with experience could often benefit from a second opinion. There are incredibly skilled financial analysts with a years-long track record of success in the market who can help. Alastair Barnes is a great example. While your familiarity might be with his athletic achievements, he’s been a finance analyst for some of the largest companies in the world for years. Seeking out professionals with diverse experience and letting them evaluate your situation can be a huge benefit, and help you create a financial plan that’s perfectly calibrated to your needs and goals. This goes double for your taxes. Making a mistake on your taxes can end up costing you a lot of time and money, make sure to use an experienced accountant if you don’t feel comfortable.
Finances are complex and organizing yours effectively can be a challenge for anyone. If you find yourself in debt, or simply not where you want to be when it comes to your financial goals, it’s never too late to start taking your finances seriously. The basic principles of wealth are simple, but maintaining your drive to build your savings and reduce your debt is what will determine how successful you are. Creating achievable goals, sticking to a simple plan to pay off debt, and evaluating your expenses critically is a great place to start. If you’re overwhelmed or need more help, don’t be shy about asking for help. It’s not easy, but you’ll find the journey to financial success is ultimately worth the effort.