Dreaming about being financially successful is as common as dreaming about fitting into that tiny bikini one day or finding your one true love. We think it is about time that you take your plans for a shining financial future and make it into an actual reality. We can’t promise that your bank account will suddenly look like a celebrity’s, but we can help you save up enough to secure a comfortable life for yourself.
1. Make a Budget and Stick to It
Making a budget might seem like a no-brainer, but most people don’t do it. Yes, it takes a little bit of effort at the beginning, but once you have it figured out and make it a habit to stick with it, it will become the easiest way to save money. You have to be totally honest with yourself regarding how you spend your money. Take a look at your finances from the past year (online banking makes this really easy to do, but there are also tons of apps out there designed for this exact thing) and figure out where you spend the most money. Usually, that will probably be your rent, but what is after that? If you find that you spent tons of money on constantly eating out, buying new clothes and buying all the latest gadgets, those are the areas that you can easily change. Sure, buying a new car sounds like a great idea, but do you need it? Probably not more than you need a retirement fund.
2. Always Pay Your Taxes
Tax season is stressful. Not only do you have to actually file them, but there is the chance that you might owe the IRS at the end of it all. Not all of us are lucky enough to actually get reimbursed after filing. But even if you know that you will owe the IRS money, you still have to file your taxes. Plenty of people are totally fine with the idea of unfiled tax returns—don’t be one of them. Not filing your taxes can result in some sky-high penalties (sometimes up to 10 times the original amount you owed) and some serious interest. Consider enlisting the help of a tax professional to help you out, but if you can’t afford to do that, you should contact the IRS and get their advice. They might be able to waive penalty fees, give you an extension, and/or set up a payment plan with you.
3. Take a Look at Your 401(k)
Does your job offer a 401(k)? If they do, you should take a look at how much money you are contributing each pay period and consider increasing the percentage. Increasing the amount deducted from your paycheck by even just one percent will make a difference to your retirement fund and you probably won’t even notice it missing from your check since it is deducted before taxes are taken out. That means that you are being taxed on a smaller amount of income, which means you will be taxed less. It usually balances out fairly well. If you get a raise, make sure to remember to increase your 401(k) contribution at the same time.
4. Invest Wisely
While it might be tempting to track the stock market like you are watching an exciting football match, resist the temptation. Leave the sport of stocks to the professionals. You should avoid the trendy ones and stick to stocks that will rise in the future. For instance, those who invested in renewable energy back in the day when no one was giving it any attention are now reaping the benefits.
5. Get Rid of Debt
You won’t be able to secure a glowing financial future if you are waist-high in debt, so do whatever you can to get out from it. Planning a budget will certainly help you save up money you can pay your credit card off with. There are also things out there that are designed to make saving money even easier, like apps that squirrel away small increments of money from your checking account and deposit it into a savings account with them. By tracking your spending habits, the program is designed to take amounts out that you won’t even notice.
These five simple tips can transform your financial health. Consider which of these you can incorporate into your daily life—you’ll thank yourself later.
