Earn What You’re Worth and Spend Less Than You Earn
Stick to a Budget
One of my favorite subjects: budgeting. It’s not a four-letter word. A budget helps you see where you are spending your money and set spending and savings goals. It doesn’t matter what your income is, you need to have a budget.
Pay Off Credit Card Debt
Credit card debt is the number one obstacle to getting ahead financially. Those little pieces of plastic are so easy to use, and we tend to forget that it’s real money we’re spending. Even if you’re just using your card for small purchases, those add up over time, and despite our resolve to pay the balance off quickly, the reality is we often don’t and end up paying far more for things than if we had used cash.
Have a Savings Plan
You’ve heard it before: Pay yourself first! If you pay yourself last, chances are you’ll never have a healthy savings account. Resolve to set aside a minimum of 5% to 10% of your salary for savings. Better yet, have the money automatically deducted from your paycheck and deposited into a separate account.
Maximize Your Employment Benefits
Employment benefits like a 401(k) plan, flexible spending accounts, medical and dental insurance, etc., are extremely important. Make sure you’re maximizing your benefits to take full advantage of the money you’ll save by reducing taxes and out-of-pocket expenses.
Review Your Insurance Coverages
Many people get talked into paying for extra life and disability insurance, whether it’s by adding these coverages to car loans, buying whole-life insurance policies when term-life makes more sense, or buying large life insurance policies when you don’t have any dependents. It’s important to have enough insurance to protect your loved-ones and your income in the case of death or disability, but it’s important to keep from being over-insured.
Update Your Will
70% of Americans don’t have a will. If you have dependents, no matter how little or how much you own, you need a will. If your situation isn’t too complicated, you can even do your own with software like Will Maker from Nolo Press. Protect your loved ones. Have a will made.
Keep Good Records
If you don’t keep good records, chances are you’re not claiming all your allowable income tax deductions and credits. Set up a system immediately and use it all year round. It’s much easier than scrambling to find everything at tax time, only to miss items that might have saved you money.