What is it about money that makes it so hard to keep track of? And what is it about the seemingly inescapable tendency for our expenses to always meet our income? If you’ve ever had a substantial raise or have come into a small sum of money, you probably know just how quickly your lifestyle can change to meet your current net worth. If you know this experience all too well, then you are desperately in need of a financial plan. Without a financial plan, it won’t matter how much your salary grows – because you won’t know how to make your money work for you. If you have no idea where to start, here are a few pointers on how to create a personal financial plan.
Jump start your credit. Each year you are entitled to one free full credit report. You want to be sure that you don’t have any fines that are in collections, or records of unpaid debts. If you do, you will want to set aside a budget to take care of those immediately. You won’t be able to earn credit until you have a clean report. If you don’t already have a credit card, you will want to apply for a low-risk credit card with a credit union. Never spend more than 10% of your credit limit, and always pay off your bill in full. You want to have as many lines of credit open as possible, and all of those lines should be paid off in full whenever you charge anything. You just want to wait at least 6-12 months between applications for each one.
Analyze your spending. Financial planning for the future starts with analyzing your past. So the first thing you want to do is take a close look at your spending patterns. If you don’t have at least a year’s worth of spending documented and categorized through one of the major accounting websites, then you should do so immediately. This is the best way to track your spending habits and learn how to set goals for yourself. You can set budgets for each of your spending categories, which you can check anytime you want to from your smartphone. You can connect all of your bank accounts and credit lines to get a regular overview of your financial progress. The longer you analyze your spending, the easier it will become to set budgets for yourself and stick to them so that you always have enough money for your most important expenses.
Invest your money wisely. One of the most important expenses you should be prioritizing is your retirement account. If you haven’t already started investing in your retirement, then it’s time to get started. Because when it comes to investments, time is always on your side. Of course, there are a lot of factors which will determine the right kind of retirement account for you. Your age, occupation, and socioeconomic status play a great part in determining the best way to make your money work for you. You can learn exactly what kind of retirement plan is best for you with Lindsey Wealth Management. They’ll help you get your account started and answer any questions you have about the market and your plan.
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