Smart Ways to Improve Personal Finance Now

Whether you are learning to manage your finances for the first time, well-seasoned, there is always room for improvement.  After all, the end goal is having money for retirement, so it depends on what we do day-to-day now that will make a difference later on.  Retirement may be the furthest from your mind now even if you are decades away from retirement, but it will come up quick, and you want to be best prepared the earlier the better, so effectively managing personal finance is important.

Be Prepared in Case of Emergency

You never know what may come up in life so it is good to have a little buffer zone, so that you do not have to put on a credit card or take out a loan and put yourself into debt.  After all, if you are allocating funds effectively or not, there will not be much leftover at the end of the month anyways, especially to pay back debt.  Experts have said that having at least three months’ worth of expenses in an account for easy access is about right.  Anything more than that may be too much to be sitting in an account without growing.

Increase Savings Contributions

Now that you have built up a little emergency fund, all of your savings should go strictly towards retirement.  So whether you can contribute to an employer 401(k) account or an IRA, the earlier you contribute the most you can, will make the most over time so you can life off during your golden years.  Check out any company-matching contributions at work, as you should at least be putting in that maximum, otherwise that would be leaving free money on the table.  Even if you have to make sacrifices in other areas, this should be a priority.

Reduce Unnecessary Expenses

Speaking of making sacrifices, one are that will be tough but a must is reducing unnecessary expenses.  This can be a combination of impulse purchases and just careless spending in general, whether it is going on shopping sprees, or one of the most popular spending trends, going out to eat.  If you look at last month’s bank or credit card statement, and circle all of necessary monthly expenses such as mortgage, utilities, car lease, etc. and compare that to other spending, you may be surprised.  Add up what probably should have been avoided and you could be netting a few hundred extra a month.

Don’t Do It Alone

Handling the finances is a tough job, so you don’t have to do it alone and hold the burden weight on your shoulders.  If you are single you can consult with a financial advisor or a family or friend that you trust, and if you have a significant other, be sure to involve that person as well, especially if you are sharing funds, so any sort of saving and spending budget should be consulted with each other, as you are in this together and should solely have to handle the finances

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