Once you decide that you want to improve with the money, you should start making changes. Most of us tend to prioritize the things we’ve already started about things we “want to do” in the future. In other words, if you do not start now, who knows when you will actually do it? I wanted to be in better shape for a year, but it was not until I signed up for a monthly subscription at my boxing academy that I started training again. The first step of just recording my goal came true.
If you want to improve with money, do something today to start changing your behavior and change your money mindset. Do not know where to start? Here are six things you can do today to improve your financial situation and your way of thinking about money.
- Open an online bank account.
If you could pay $ 144 / year or earn $ 21 / year, which one would you choose? You’d like to make $ 21, right?
So, leave the conventional bank and switch to an Internet-based bank. Large banks have to pay rent for all their physical locations, which means they have less money to pay interest and generally charge more fees. Internet-based banks, on the other hand, do not have to pay for brick and mortar sites and can pass these savings on to you. In addition, FDIC insurance makes both types of banks equally safe for deposits of up to $ 250,000.
Going back to our example, one of my clients had a savings account with a balance of $ 2,000. He was charged a monthly maintenance fee of $ 12 ($ 144 per year) just to keep the account open and only managed a pathetic 0.01% APY interest.
We’ve changed your account to an Internet-based bank that does not charge monthly fees and has an interest rate of 1.05% APY. So instead of paying $ 144 / year just for having a savings account, you are now pocketing $ 21 / year in interest.
If you are interested in making the change, two of my favorites are Ally Bank and Synchrony Bank. Both currently have an interest rate of 1.05% APY and do not charge any monthly maintenance fee for savings accounts.
- Start investing.
If you are not investing, you are actually losing money.
The average historical inflation rate in the US is more than 3%. That means the price of everything you buy will double every 20 years. If you want to maintain your purchasing power, you need to raise your money at a rate higher than the current inflation rate. Investing is the most common way of doing this.
But where do you start? Thanks to technology, Roboadvisors make it really simple and easy for anyone to start investing. They will ask you a series of questions and, based on your answers, they will decide on what you should invest and, in fact, make the investment for you.
Two of my favorites are Betterment * and Wealthfront *. Both have a solid track record in the industry and have stylish applications that make it easy to control your investments. If you need help deciding between the two, these are the factors that can help you make your decision.
Betterment *
Cost: charge an annual fee of 0.25% for all balances ($ 12.50 per year with a balance of $ 5,000)
Account Minimal: No Minimum Balance
App Store App: 4.5 stars
Main feature: goal-based investment
Wealthfront *
Cost: Manage your first $ 10,000 for free and there is an annual fee of 0.25% thereafter
Account Minimal: $ 500
App Store App: 4.5 stars
Main resource: fiscal efficiency
The exception: If you have a high interest credit card debt. In most cases, I suggest eliminating any consumer debt before you start investing. Create a realistic payment plan to pay off your credit card debt and then invest again later.
I always say that investing is not for everyone and that you should earn the right to invest. Also, all personal financial decisions are just that, personal. Never assume that general advice is best for you. As part of our Wealth Coaching Program, we help our clients create and maintain a customized debt repayment plan and let them know when it’s a good time to start investing. If you want more information about what we do here at Invibed, you can always schedule a free consultation.
- Create a designated emergency fund or fund it.
The first step here is to open the account. Ideally, your emergency fund should be kept in a completely separate account at a financial institution different from the one you have in your daily bank. There will be times when you tempted to spend the money from your emergency fund, and making it uncomfortable to agree will force you to think before spending.
Now, set up an automatic deposit. Even this costs only $ 5 a month. You need to get into the habit of paying yourself. The economy should not be a late occurrence at the end of the month. If you do not find it easy to save, do not feel bad about it. 47% of Americans have less than $ 400 in savings, but there’s really no excuse for that.
If you want to help save money for your emergency fund, sign up for a service like Digit * or Qapital * that will automatically transfer money from your checking account to your savings, depending on available balance and consumption. Now you’re saving and you do not even need to think about it.
- Cut an expense of your life.
I’m sure there are many expenses you could do without, but let’s start with one.
“I need everything.”
Really? I do not believe. Log in to your checking account or watch your account status and review your transactions line by line. Do you like all this? Anything you buy uses that? Do the things in which you spend your money bring great value to your life?
Cancel this signature box that has more * meh * elements than the excellent ones. Cancel your ClassPass and start taking free classes at your gym. Stop eating Chipotle 5 times a week and go to the grocery store and buy rice and beans.
There is one thing in your life that you can change that will free up some of your money to allocate it to something you value more (or you need, like that emergency fund!).
- Find a way to increase your income.
Do you think your current salary allows you to live the lifestyle you want and prepare for the future? If the answer is no then you need to find a way to increase your income.
This may be possible with your current employer. Are you late for a raise? Is there an open top-level position to which I could apply? It is entirely possible that you can increase your income by simply asking for a raise or qualification for a more advanced position. It’s shocking, but less than half of working Americans have already asked for an increase for their employer.
If you just start working on your current position or recently received a raise, it may not be appropriate to ask for more money or apply for a different position in your company. You can also be a freelancer or work for yourself. If this is your case, you should be more creative.
Generally, I suggest an uproar as a first step to increasing income. Problems can range from driving through Uber a few hours a week to starting an e-commerce business.
Once you decide how you will increase your income, write it down on a piece of paper. Then write down what you have to do to reach it and give yourself a deadline. For example, if you are requesting a raise, you should prepare for that meeting. Your role may look like this:
Request a $ 5,000 raise by July 31.
- Provide my performance report
- Prepare to discuss three key achievements I’ve had in the last 12 months
- Schedule a meeting with my manager
- Think of a rescue goal.
If you retire or buy a home does not excite, what does this mean? I guarantee that whatever your goals are, they demand money. Some goals require more money than others. A good exercise to do is imagine your life in 10 or 20 years. If money were not an object, where would you be? Who would you be with? What was I doing?
From now on, when you are saving money, think about this goal. Not about money. Money is just the tool that is making the life you want to come true.
How else can I be better off with money?
He has just learned six things he can do to improve on money right now.