Are you putting off saving for retirement because you don’t know how? Are you accepting your finances “as is” without question? Are you wishing and hoping instead of trying and doing? Let’s face it, the law of physic is universal – without action, there is no reaction. That is, without doing anything to improve your finances, they won’t improve.
Below are 7 items that cost you nothing to do but will have the most impact on your financial future. Don’t let procrastination stand in your way.
This one is obvious. Learning is a never-ending process and you should do it daily. There are a lot of good financial websites, and you can enhance your knowledge by reading a few articles each day. If you don’t understand a word or a concept, do a search and find out what it means. One of the best ways to learn is to just get out there and do it…even if you don’t know all the answers.
Start a Budget
If you don’t have a grasp of your household finances, start a budget today. Start by making a list of your income and expenses. You can do this on a notebook to start and slowly improve upon it as you learn more about budgeting. (If you want to have some fun and knock this off your list quickly, check out my post on controlling your budget in 5 minutes a month.)
Spending less is a very powerful way to improve your finances. But don’t get stuck trying to figure out what, where, when, and how to cut. Start simply by asking yourself these simple questions when you pay a bill or are about to buy something:
- Do I need this?
- Do I need this much?
- Is there a cheaper alternative?
Start now and you can always put together a better expense reduction plan down the road.
Start an Emergency Fund
If you don’t have one yet, start today. Open a separate high interest rate savings account and deposit a small amount as you get each paycheck. Even as little as $50 a week adds up to $2,400 a year.
You can later improve the process by making the deposits automatically from another account or straight from your paycheck.
Pay Off Debt
Still have credit card debt and student loans? Start a debt snowball today. Set aside any extra money you may have and use it to pay off your highest interest rate debt.
Start Investing For Retirement
Does your employer offer a 401k? If the answer is yes, start contributing today. Even 1-2% invested in a balanced fund is better than nothing at all. Of course, you should at least try to contribute enough to get the full company match, or more.
If you don’t have access to a 401k, you could start an IRA with a discount broker. Don’t worry about finding the best discount broker, just pick a relatively good one and go for it.
Create a Financial Plan
Now that you have the basics in place, learn more about financial planning and put together a plan with both short and long-term goals. More importantly, put an action plan together for your goals and start working on it.
Start today. It doesn’t have to be perfect. The important thing is that you start and get the momentum going. You can always make improvements later.
Pinyo is the owner and primary author of Moolanomy Personal Finance blog. Moolanomy focuses on practical money management concepts, personal finance tips, and wealth building. If you like this article, please visit his blog. Lastly, you can leave financial questions on Moolanomy Answers where Pinyo and other community members participate to provide you with answers.