Keys to Financial Success
Making resolutions to improve your financial situation is a good thing to do at any time of year. Regardless of when you begin, the basics remain the same. Here are a few tips to getting ahead financially.
Get Paid What You Are Worth and Spend Less Than You Earn
Make sure you know what your job is worth in the marketplace, by conducting an evaluation of your skills, productivity, job tasks, contribution to the company, and the going rate. Being underpaid even a thousand dollars a year can have a significant effect over the course of your working life. No matter how much or how little you’re paid, you’ll never get ahead if you spend more than you earn. It doesn’t always have to involve making big sacrifices.
Stick to a Budget
How can you know where your money is going if you don’t budget? How can you set spending and saving goals if you don’t know where your money is going? You need a budget whether you make thousands or hundreds of thousands of dollars a year.
Pay Off Credit Card Debt
Credit card debt is the number one obstacle to getting ahead financially. Despite our good resolves to pay the balance off quickly, the reality is that we often don’t, and end up paying far more for things than we would have paid if we had used cash.
Contribute to a Retirement Plan
If your employer has a 401(k) plan and you don’t contribute to it, you’re walking away from one of the best deals out there. If you are already contributing, try to increase your contribution. If your employer doesn’t offer a retirement plan, consider getting an IRA.
Have a Savings Plan
Make sure to set aside a minimum of 5% to 10% of your salary for savings BEFORE you start paying your bills. An even better approach is to have money automatically deducted from your paycheck and deposited into a separate account.
If you’re contributing to a retirement plan and a savings account and you can still manage to put some money into other investments that is even better to your overall financial planning.
Maximize Your Employment Benefits
Employment benefits like a 401(k) plan, flexible spending accounts, medical and dental insurance, etc., are worth big bucks. Make sure you’re maximizing yours and taking advantage of the ones that can save you money by reducing taxes or out-of-pocket expenses.
Review Your Insurance Coverage’s
Too many people are talked into paying too much for life and disability insurance. What is important is that you have enough insurance to protect your dependents and your income in the case of death or disability.
Update Your Will
70% of Americans do not have a will. If you have dependents, no matter how little or how much you own, you need a will.
Keep Good Records
Keeping good records all year will save you time and money, instead of scrambling to find everything when tax season approaches.