Financial success can mean different things to different people, but for many it’s managing money in a way that offers a financially healthy future. From building your savings to creating goals for the future, here are some easy ways that you can set yourself up for financial success.
1. Always Pay Yourself First
When your paycheck is deposited into your checking account, it’s easy to focus on the immediate future: paying bills, buying groceries, or going to the movies on Friday night. But before any of that happens, it’s important to pay your future self first by setting money aside in savings.
By paying yourself and your savings first, you’re planning for the future and building a safety net. Savings are important for making future goals possible, like buying a car or a house, or taking a vacation. You can even create multiple savings accounts for different goals, and track your saving progress using tools like online banking or a mobile app. Having money set aside in savings can also make it easier to deal with unexpected expenses, like an urgent car repair or a surprise medical bill. You can even have part of your paycheck automatically deposited into your different savings accounts, making it easy to pay yourself first!
2. Shop For The Best Rates
If you’re thinking about opening a new credit card, buying a house, purchasing a vehicle, or opening a personal or business checking or savings account, it’s important to look for the best interest rate. Finding a lower rate on a loan can save you from paying unnecessary interest and lower your monthly payments. A higher interest rate on savings and checking accounts also means your money earns more in interest.
Watching the interest rate is especially important when opening a new credit card. Store charge cards and even mainstream rewards credit cards can come with a high interest rate, and some have costly annual fees. A local financial institution like a credit union may offer a credit card with lower interest rates and few or no fees that can help save you money over time. Be sure to read the fine print whenever opening a new account or taking on a new loan so you understand if the rate could change over time.
3. Check Your Credit Score
Credit scores help lenders determine your interest rate when purchasing a home or vehicle. Your credit score may also be reviewed when you apply for rental housing or certain job positions. Knowing your credit score can help you make accurate loan payment estimates. You’ll also be able to take measures to keep your score healthy. Many financial institutions, including credit unions, banks, and credit card companies, share your credit score with you for free as part of their online banking service. You’re also able to request a copy of your credit score from each of the three credit reporting agencies (Experian, TransUnion, and Equifax) once a year for free without it impacting your credit.
4. Create And Stick To Your Goals
When you imagine yourself in the future, do you know how your financials will factor in? Creating focused and achievable goals can help make your ambitions a reality. Looking at your different expenses for the month is a great place to start identifying goals. Determine what you’re spending your money on, decide whether it contributes to your future goals, and adjust your spending from there.
When setting goals, making them realistic is the key to success. If you know that you spend $200 on restaurants and fast food each month, setting a goal of spending only $50 may make it difficult to stick to your budget. Start small and be sure to celebrate even the little wins!
5. Look Over Your Monthly Statements
A key part of staying financially fit is simply being aware of your transactions and balances! By looking over your monthly statements, you’ll be able to see your spending for the month, verify charges, and watch any loan balances go down as payments are made. Staying on top of your monthly charges also reminds you of recurring costs, such as streaming services or subscriptions, that you may no longer need. By cancelling unnecessary subscriptions, you can save money and work toward reaching your goals even faster.
Try picking a couple of the suggestions above to start next month and work your way up to incorporating all five into your life. Before you know it, you’ll be finding success!
Looking for more tips and tricks to help you along the way? Be sure to check out Royal’s other articles!