Financial wellness doesn’t have to be complicated. While you’ll eventually want to work up to a financial plan that includes a detailed budget, savings goals, and a retirement plan, there are small things you can do today to set you off on the right foot. These 10 tips may help you get organized, save more money, and master the basics of personal finance.
Keeping Different Savings Accounts for Each Goal
Keeping a different savings account for each one of your goals—whether a new car, a down payment on a house, or even a big vacation—is a simpler way to keep track of how close you are to achieving your goals.
If you only have one account it may be hard to parse what money goes where.
What’s more, separate savings accounts may make it easier to prioritize the goals you’re eager to reach, allowing you to fund those accounts first.
Having a clear goal assigned to each account may also decrease the chances you will raid the account to cover another expense. If an account is clearly labeled Emergency Fund, you may think twice about using it for a trip to Tulum.
Finding a Good Interest Rate
Is there anything better than money you don’t have to work for? The interest you’re paid for keeping money in a bank account is basically that. However, if you do spend some time and effort on finding accounts that offer high interest rates, you can make your money work harder for you.
You might consider high-yield savings accounts. Also, consider checking out online savings accounts.
Automating What You Can
Make your accounts smarter for you by simplifying and automating as much as you can. Have money sent directly from your paycheck into your savings, checking, or investment accounts. You can automate investing inside your brokerage account so you don’t have to worry about what investments to buy every time you transfer cash.
See if you can have your regular bills automated as well. Having utility bills paid directly from your bank account means you don’t have to worry about missing a payment. Automatic payments on your credit cards can help you avoid carrying a balance month to month and paying a lot of interest.
Making It Harder to Use Credit Cards
If you tend to carry a credit card balance, credit card debt can get expensive very quickly. Consider that the average credit card annual percentage rate (APR)—the interest you pay on your balance—is around 17% in 2019. If you have trouble paying off big credit card bills on time, make it a bit harder for yourself to use your cards.
First, don’t carry multiple cards with you. In fact, you may want to leave your credit cards at home. Even consider putting it somewhere hard to access, like a high shelf, so you aren’t tempted to use it on impulse.
If you feel more comfortable carrying your card with you, try leaving a note on it that says, “Do I really need this?” This simple trick can be enough to break the spell when you’re standing in a checkout line with an item you want but don’t really need.
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Practicing the 24-hour Rule
Speaking of temptation, online purchasing has made it easier than ever to impulse buy. You’re only one click away from a new jacket, blender, or television. Before you make a purchase online, put it in your shopping cart for 24 hours and revisit the purchase the next day.
Slowing down before buying can give you time to reflect on whether you really do need the item or if you can do without it.
This may sound counterintuitive, but spending cash can actually help you save money. Many people don’t give a second thought to swiping a credit card when they buy something.
After all, when we swipe a card, it may only feel like vague numbers going up or down somewhere in the ether.
However, when we spend in cash, something physical is changing hands, and the sense of actually spending money can be more present.
In addition, it can be easier to keep track of spending when you use cash, and doing so may give you pause to consider whether you need to make a purchase at all.
You may even consider creating an all cash budget in which you set aside a specific amount of cash to cover your expenses and stick to those limits.
Lowering Your Regular Bills
It may feel like your bills are set in stone, but lowering your cable bill, phone bill, insurance premiums, and more is an effective way to trim expenses. First, take a look at the bills you want to spend less on. Research how long you’ve been a customer, how long you’ve paid your bills on time, and what rates competitors are offering.
Call your vendors and ask them specific questions about how they can help you spend less. Be polite and use your track record or competitors’ offerings as jumping off points for your conversation.
You don’t have to cancel your service, but being prepared to leave for another offer may give you more leverage during your conversation and spur your vendor to action.
Keeping track of your savings and spending can sometimes be a stumbling block when maintaining a budget. Consider enlisting the help of one of the myriad savings and budgeting apps available to make the process easier and help keep you on track.
For example, SoFi Relay tracks all of your money, all in one place, at no cost, so you stay on pace to hit your goals.
This hack may be easier said than done. Deep cultural taboos can make it tough for us to talk about money. However, doing so can make a huge difference in your financial plan. For example, if you’re trying to stick to a budget, don’t be afraid to let your friends know.
They may be more cognizant about not inviting you to expensive dinners and quicker to spend time with you participating in cheap or free activities like game night or a picnic in the park. If you’re in a relationship, consider talking to your partner regularly about your personal and joint finances to make sure you’re on the same page.
Finding a Money Mentor
When it comes to financial matters, it can be tough to go it alone. Getting money advice from someone who’s done it before can be a huge help.
Consider finding a financial mentor who can help you strategize ways to save, spend, and invest your money. This person could be a trusted friend or relative.
Or you may consider hiring a professional financial coach or financial planner to help you make a plan.
With SoFi Checking and Savings®, you can get the best of both worlds when it comes to spending and saving your money. SoFi Checking and Savings is a checking and savings account that earns you interest on all your cash.
You can track spending, savings, and get access to financial planners. And there are no fees (quick note: our interest rate and fee structure is subject to change at any time), potentially saving you even more money—getting you to your financial goals faster.
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