Getting started Goals Setting financial goals. Banking Opening a bank account. Alternatives to traditional banks. Money market deposit accounts and CDs. Spending Making a budget. Debt Paying off debt. Credit reports and credit scores. Taxes Taxes you owe. Income tax penalties. The Alternative Minimum Tax. Health insurance Choosing a plan. Where to buy coverage. Finding affordable coverage.
Employee stock options Employee stock options. Employee stock option plans. Exercising stock options. Buying a car Determining your car budget. Buying a used car. Car insurance Car insurance policies. Stocks Investing in stocks. Bonds Investing in bonds. Bond investing risks. Mutual funds Investing in mutual funds. How to pick mutual funds. Asset allocation Asset allocation. Hiring financial help Hiring financial help. How to hire a financial planner. Make any necessary spending adjustments.
If you are striking even or spending too much each week, look to your discretionary expenses as a way to cut costs. Scrutinize each purchase to determine if it was absolutely necessary. Play with the numbers to determine how much you would need to cut back in a certain category to see the savings you desire and to get you back into a positive income-expense ratio.
Part 2. Write down how you envision your financial future. This is less about creating specific goals and more about being realistic regarding what kind of lifestyle you want moving forward. Do you plan to make major investments, like purchasing a house, or would you like to use your funds for travel?
Do you want to accumulate your wealth in savings or establish a safety fund and then spend as you like? Do you need to support others with your funds? Calculate your total assets. Add together any monies that you currently have in checking or saving accounts, any interest or capital in retirement funds or investments, and the adjusted value of any major property, like a car or home.
Knowing this amount may not seem important, but it lets you know how to set realistic goals that apply to your entire financial well-being. Create a list of short-term goals. These are goals that can be realistically accomplished in under a year.
Brainstorm a list of all possible options and sort them according to priority and cost. Then, decide which ones you can start to work on based upon the available funds in your budget. Divide this up by the amount that you can set aside for it each week while staying in your budget. Make long-term financial goals.
Look for ideas that will take over a year and closer to years to complete. This could mean purchasing a home or even increasing retirement savings. Estimate when you would like to achieve each goal and attach a monetary value as well. Then, divide the monetary value by the number of weeks it will take. There are 52 weeks in a year. Enter your goals into the budget as expenses. This is an important step because it takes your goals out of an illusion and into reality.
It also helps to ingrain a habit of saving, instead of spending. Part 3. Schedule a weekly budget planning session. A budget is a constantly changing thing and requires continual monitoring and updates. Contact companies for bill reductions.
Reach out to all of the companies who you are paying regularly and inquire about any cost savings programs or discounts. As always, when talking with customer service representatives, try to stay friendly and focused. If you get too frustrated, just thank them, hang up, and call back later. Use a spending or bill payment tracking app. There are many budget applications, such as BillGuard or Dollarbird, that you can use on your phone, computer, or both.
Experiment with which one is the best for you, as some charge a fee while others are free. Make sure to reliably enter data into the app, as it will only be as helpful as the information you give it. Developing a budget is a great way to organize your finances, but challenges can arise if your bills and your paycheck come on different schedules.
For example, your regular monthly bills, like your rent, cell phone bill, credit card statement and student loan, might all be due at different times during the month, while you get paid every Thursday. Having a weekly spending budget in addition to your regular monthly budget can help you stay on track.
The budget process works the same whether you set up a weekly or monthly budget, but because most of your recurring bills likely come on a monthly basis, it helps to start with a monthly budget. Your monthly budget has two main components: your income and your expenses. You'll need to keep up with both components to make your weekly spending budget work. The secret to financial security is spending less than you make, but before you can do that you need to know how much you income you have available.
Use a personal finance software system to track your income for the month from all sources, including your salary, wages, tips, commissions, bonuses, rents, interest on savings and investment income. Use a personal finance software system to keep track of your expenditures, including the due date and amount of each bill.
Your monthly expenses include your fixed expenses, such as your rent and car payment; variable living expenses, such as your utility bills, food and gasoline; irregular expenses, such as a bi-annual insurance payment; and discretionary expenses, such as entertainment and eating out.
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