August 20, 2018 Personal Growth How to Set Yourself up for Financial Success this Year I’ll be the first to admit that I’m not a pro when it comes to finances. But, I’m thankful that Rob works in finance, my sister worked in finance for several years and that my parents made sure we had a decent understanding of it all before we graduated from college. It’s made me aware of how important it is to start creating and maintaining good money habits as early as possible! This year, money has been on the forefront of my mind as we grew our family. I’d always heard that kids were expensive, but I’m still blown away by how many expenses we have for Owen alone! I’d gotten a little lazy about my financial goals in the past couple years, but I’m jumping back into my own good habits. Here are a few things that have worked for me and a few things I’m hoping to put in place! Keep a Monthly Budget Sheet I used to do this and admittedly fell out of the habit, but I’m thinking of starting it back up again. It’s such a good practice to help you realize where you’re spending your money each month and shows you were you can easily cut back. You can easily do it in an excel spreadsheet and break it down into categories like grocery, dining/drinks out, shopping, bills, etc. If you find that you’re spending a lot more than you thought in one category, set a monthly limit for yourself and stick to it. Make sure to add the non-negotiable items like rent, bills, groceries, car payments, gas or public transportation. Things like this take up a big chunk of our budget every month, so don’t forget to add them! It will give you a better idea of what you realistically have to spend that month. You can then set reasonable goals for saving and investing as well! Retirement Fund If you work in a traditional job, you probably have a 401K or some sort of retirement fund set up as part of your benefits. Since I work for myself, I don’t have that, which means I have to actively add money to my IRA at the end of the year. It’s things like this that add up a lot overtime. Your 65-year old self will be happy that you started doing this in your twenties! Autopay Bills If I had to manually write checks each month for our bills, I can guarantee I would have racked up a ton of late fees. I tend to put things like that on the back burner and then forget about them. Autopay takes care of it on it’s own and will make sure you never pay late. Just make sure that you check on these every few months to make sure that your bill isn’t higher than expected. Invest Now Investing is one of those things that I’m honestly pretty clueless about. One thing I do know is that the earlier you start, the better! I’m very thankful that my parents instilled in us early how important it was to save and to invest for our future. Rob also works in finance which is helpful if I ever have any questions. If you haven’t started, I highly recommend you start now—even if it’s not much. Even if it’s not a ton. I remember seeing some statistic about how starting to invest earlier can make such a huge difference over a long period of time. Thankfully, Rob works in finance and my sister majored in finance too so I have plenty of people to ask for advice. Accountability Partner Maybe it’s your spouse, a friend or a financial planner. Have someone you trust to help you stay on track with your financial goals. Set a monthly meeting over coffee, maybe at home if you’re trying to save money and chat about which goals you hit, where you’re still struggling and brainstorm ideas to reach your goals. Have a Nest Egg My dad always says that cash is king, which is funny because I literally never have cash in my wallet. But, what he also meant was that having cash at the ready in your bank account is really important in case of emergencies. I keep a chunk of cash in my savings account for unexpected things. Thankfully, I haven’t had to dip into it, but it makes me feel safe knowing it’s there. Don’t Spend More than You Have Duh, right?! But with credit cards it can be so easy to swipe and not realize how much you’re actually spending until you get your bill at the end of the month. If you’re not the best at managing your money, creating a monthly budget is probably a smart idea so that you know how much you can actually afford to spend each month. Pay off your Credit Card Bill Each Month This falls into the section above a bit! Make sure you’re not spending more than you make so that you can pay off your credit card bill each month. This helps build good credit and keeps your from creating credit card debt which can rack up quickly with interest rates. Take Responsibility Okay, a little real talk—we’re all adults and sometimes we need to step up and take responsibility for our actions and our spending habits. This might mean that we forgo some things we enjoy doing to make sure we have enough money for rent or bills, or taking up a side hustle to make a little extra cash to pay off student loans faster. You are 100% capable of taking control of your financial future, but it will take some planning and dedication. How do you stay on top of your financial goals? What big financial goals have you hit?! BTW, how to make money on the side, and tips for starting your own business.