Guys, let’s be honest, I have days where I just hate money. It’s such a complicated system. How much am I supposed to save and when? Am I saving enough for retirement? Should paying off the mortgage quickly be a priority? Will we be able to send our kids to college even though we didn’t start saving during the 3rd month of my first pregnancy?
Many of you are probably in the same boat. We want to create a better financial picture for ourselves, but we’re not sure how. With that in mind, I’ve gathered some basic money tips that have helped me along the way. I’ve also recently started looking at some professional financial advice, so there’s some info about that in here, too. #LetsMakeAPlan, and get your family on the road to financial success!
#1. Take an honest look at your finances.
I know. It hurts to see exactly how much you’re spending on lattes every week, but you need to know. Pretending you don’t spend as much as you actually do is a guaranteed way to screw up your bank account. Stop ignoring your money!
Keep your receipts for one month. Then sit down, and figure out how much is being spent and where it’s being spent. Make categories for things like groceries, gas, meals out, entertainment, etc. Don’t forget to track your income as well! Doing this will give you a big picture view of your finances.
#2. Figure out where you can make improvements.
You might be surprised by little things that are making a huge impact on your wallet. One thing we learned by looking at our finances is that a lot of our “extra” cash was going to big box stores. I swear they have cash vacuums just inside the doors, because every time we walk in, we spend at least $50, even if we only needed ketchup. We started shopping at smaller, less diverse stores, instead. Now, if I need ketchup, I go to the grocery store. It might cost a few cents more, but I also didn’t pick up ten more items that I thought we “needed” at the time.
#3 Take a hard look at your debt.
Debt is big business in the U.S. In fact, finance and insurance was the fourth largest industry in 2017, ranked just behind state and local governments*. Those banks aren’t loaning you cash out of the goodness of their hearts. They’re making money off of it in the form of interest payments.
That cash adds up! The average American household is carrying over $15,000 in credit card debt alone.* Since, the average interest rate for someone with “good” credit currently stands at 19.88%,* nearly 20 cents of every dollar you charge is going into the credit card company’s pocket. Wow!
Paying cash for the things you need could possibly save you $20 for every $100 of groceries you buy. That’s enough for two people to take an evening off and have a little date night!
#4 Buy less, less often, and more used
I have too much junk. For realz. And I’m not alone. The average size of a new home in the U.S. is nearly 2700 square feet. In 1973, it was only 1600 square feet.* Now, I know we’re getting fatter as a nation, but I don’t think our bodies actually occupy a significantly larger amount of space. Plus, since we’re having fewer kids,* we’re housing fewer people in those homes. So, why do we need these gargantuan (and expensive) houses? Stuff.
We have more stuff than ever. We see the stuff. We want the stuff. We buy the stuff (often on credit). Then, we’re broke because of our….you guessed it….stuff. It’s a vicious cycle. Break it. Buy fewer things. Think long and hard about your purchases and only get something that you’ll truly use and enjoy. Buy used whenever you can, especially for large purchases. I recently saved $30 by buying a $3 set of brand new silverware at a rummage sale instead of the set I wanted at Target. It’s nice heavy stuff, too!
#5 Get help from a pro
It’s always good to get expert advice. With that in mind, go find yourself a CERTIFIED FINANCIAL PLANNER™ professional. Almost anyone can hang up a sign that says they’re a financial planner. A CFP® professional, however, is the real deal. Every financial planner with the CFP® certification has been trained in over seventy different areas of finances – everything from estate planning to investment planning. They also have over 4,000 hours of financial planning experience and have passed a very difficult CFP® exam that measures their ability to apply financial knowledge to real people and situations. Plus, they’re a fiduciary, which means that they are bound, by law, to act in YOUR best interest when providing financial planning!
A CFP® professional can look at your finances and give you the advice you need to make your future a bright one. They can see where you need to cut spending, how to invest the money you save, and might even be able to solve that crippling “Oh my God, how am I going to pay college tuition” feeling you wake up with at 2 AM.
#6 Make a plan
Put all of the good advice you’ve gotten to work! It’s YOUR money, so take charge of it. For more help, check out letsmakeaplan.org. It’s a great website that can connect you with your very own CFP® professional. Plus, they have good advice there that you can use, even if you aren’t ready to make the leap to professional financial help.
The financial future of our nation has been looking pretty bleak lately. Fortunately, with the help of these tips and your CERTIFIED FINANCIAL PLANNER™ professional, your own finances can still be rose-colored. #LetsMakeAPlan and secure a firm financial future for us and our families!
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