8 Ways to Master Your Money
Many people don't realize the importance of saving money, nor do they consider taking proactive steps to grow their assets. While it may sound complicated, the truth is increased savings and assets can be achieved easily over a period of time. If you are willing to follow these 8 steps, you'll have your money mastered before you know it:
8 Simple Steps to Money Mastery
1. Set Goals
To reach your savings goals, it pays to be SMART - specific, measurable, actionable, realistic and time-bound. Setting a goal for a fixed dollar amount within a specified time frame will help you determine whether or not your goal is realistic and where your savings priorities should lie. Saving for your retirement, a home or a vacation is a great motivator and can make saving money easier.
2. Out of Sight, Out of Mind
Saving and investing 5-10 percent of your gross annual income is simpler than you might think. Track your monthly expenses and make a budget. Redirect a set amount of your earnings with an automatic transfer from your paycheck directly to a savings account or mutual fund. If you never see the money, you won't miss it.
3. Build an Emergency Fund
Put at least 3-6 months' worth of expenses in an emergency fund. If saving that much isn't realistic for your financial situation, shoot for a smaller goal. Once you reach that amount, set another incremental goal and keep at it. It's especially vital to maintain your emergency fund if you have dependents who rely on you for financial support.
4. Pay Off Credit Card Debt
Paying off credit card debt gives you a guaranteed return of the amount of interest you'd pay each year. If you want to save but are mired in high credit card balances, work toward paying them off, then use them only in emergencies and pay off the balance monthly.
5. Carry Proper Insurance
Carrying an adequate amount of homeowners, auto and life insurance is essential to protect your assets and your family. Raise your insurance deductible or eliminate dual coverage to save on premiums. Make sure to include liability coverage and shop around before you decide on a policy, as costs vary from one company to another.
6. Use a Retirement Savings Plan
If your employer offers a tax-deferred retirement savings plan like a 401(k), take advantage of it – especially if they match funds. Contributions and earnings to 401(k)s, IRAs and other retirement accounts are tax-free until you withdraw funds after you retire.
7. Diversify Investments
Putting all your eggs in one basket can hinder you from growing your assets. Consulting with reputable financial advisors can help you determine how to diversify your assets among the three major classes: cash, stocks and bonds. All investments involve trade-offs between risk and return, and diversification reduces unnecessary risks by dispersing your money among a variety of investments. Investing with a long-term perspective will help you maximize your money.
8. Create a Will
Regardless of your age, having a will in place is essential to ensure your property and assets are distributed according to your wishes. A will can also help your family avoid having to deal with the time-consuming probate process and enables you to appoint a guardian for your minor children, so they will be taken care of in the event of a tragedy.
If you're ready to start saving money and investing in the future for you and your family, contact us at 702-228-2228 to learn how you can get started with Clark County Credit Union.