The government shutdown last year sparked a tremendous amount of questions about the financial stability of the US economy. As government officials reflected on the finances of our country, it provided us with an opportunity to examine our own finances as well. Here are 5 ways to improve every part of your financial life regardless of your current monetary situation.
1. Set lofty (but achievable) financial goals.
If you are exactly where you want to be financially, then you are either extremely lucky or not being honest with yourself. For the other 99 percent of us, setting a goal helps you to determine where you want to be with your finances in the next 5, 10, or 20 years. If you have a very exact budget you can set your goals down as a number that you would like to have at a specific date. If you can’t come up with the exact number you would like to achieve, think of the lifestyle you would like to have and set your goal to make that lifestyle financially feasible. Be sure to make it a goal that is achievable and something you can continually work towards to keep you motivated.
2. Create a budget
Budgets are often talked about within the finance sector, both in terms of governments and individuals. The hardest part of a budget isn’t actually sticking to it, it’s making one! Most people will think budgeting is a good idea, but won’t take the time to sit down and make one. You can find some great templates online for how to easily create a budget that can help you to manage your finances much easier. Don’t put off making the budget, make the effort to create it today and stick to it.
3. Start investing
If you are already investing and seeing returns, well done! If not, today is the day to start. The earlier you start investing the faster you start seeing returns. Compounding interest is an investor’s greatest ally, and when you start investing at a young age the returns from compound interest can truly be staggering. You can check out an example of this phenomenon which shows just how much money you can be losing out on for every year you delay beginning your investment portfolio on Investopedia. Whether you are investing in bonds, mutual funds, stocks, Forex, or CD’s, trying to take advantage of stock splits, Fibonacci retracements, quarterly earnings statements, or just trying to understand investing terminology; today is the day to start learning and investing.
4. Protect your finances
Identity theft is an ever-present threat in today’s technological world. All it takes is the wrong person to know your social security number and some details about your personal life to wreak havoc on your finances. Never give out any personal information to anyone or any institution that you don’t have complete confidence in. Take extreme care with emails as well, many hackers will send phishing emails trying to get personal information from you. If you receive an email from what appears to be your bank or credit card company, don’t click any of the links in the email. Call your company to verify the validity of the email or type in the website directly. A common practice with phishing emails is to make very similar websites with very similar links to make you think you are on your official bank’s site and giving the information to them, but you are actually feeding your financial information to an imposter. There are also some very useful credit monitoring services that can help you monitor your finances to identify identity theft as soon as it happens and get it corrected immediately.
5. Save money by shrinking your salary
This idea of shrinking your salary goes hand in hand with a proper budget. Let’s assume you make $50,000 per year. Try to make your budget with the assumption that you make $40,000 per year. This does two things. It allows you to have a safety net each year of money to deal with unexpected expenses such as unforeseen car repairs or medical bills. It also lets you begin to build a sizable nest egg during the years that you don’t encounter any large unforeseen expenses. By making a budget with a lower salary than you actually have you also aren’t tempted to spend the additional money since it isn’t in the budget (assuming you can properly keep to your budget!).
Financial uncertainty within the politic sphere doesn’t need to spell the same for your personal finances. Take action today to start working on your money situation. If you are vigilant in your pursuit to better manage your finances to meet your ultimate goals then you will never need to worry about your financial stability even in times of political unrest.