No matter what your current financial position is, you can always improve it. Whether it is by making more money, spending less or a combination of both, there is always an area that can be fine tuned so that you can get closer to achieving your financial goals. To help you with that, below are seven ideas for improving your financial well-being.
1. Check Your Credit
It is important to know that your credit is in good standing. A while back my wife had a fraudulent account opened in her name and the only reason we found it was because we checked our credit on a regular basis. I check my credit using Credit Sesame because is it free and they will give you your credit score almost instantly along with the details of your credit report. Make sure to check your credit at least a couple of times per year to make sure that there is no fraudulent activity and that your credit is in good order.
2. Open an Investment Account
In order to become wealthy you need to have a vehicle in which you can grow your money. An investment account is the best place to start as it will give you the ability to invest in thousands of stocks, mutual funds, etc. Be careful of fees when looking at different investment brokerages as some have much higher fees than others. TradeKing is a good one to consider as they offer trades for only $4.95 while many other firms charge close to $10 for the same thing.
3. Have an Emergency Fund
Let’s face it, emergencies happen. When my wife and I were paying off our consumer debt, we had to replace two hot water tanks, we had a flat tire, and we had several other vehicle related repairs. To guard against this, you should have somewhere between 3-6 months of your expenses in an emergency fund to cover unexpected events like these. For example, if your expenses are $3,000 per month, than you should have $9,000 to $18,000 in savings. The best place for an emergency fund is a high interest bank account so that it is accessible while making a little bit of money at the same time. Discover Bank is a great place to park your cash as it pays almost 1% which is far better than traditional banks.
4. Refinance Your High interest Debt
If you have any credit card debt at all, than DO NOT overlook this option. With the average credit card interest rate around 15%, this could save you a ton of money over the long haul. Companies like SoFi will refinance your credit card debt to as low as 5.99% so that you can pay your debt off even faster. If you are looking to do this make sure that the company that you go with does not have a prepayment penalty or loan origination fees.
5. Shop for Lower Insurance Premiums
Why pay more than you have to when it comes to insurance? I have had the same insurance for years but then I decided to shop around using Esurance and they were $30 less per month! Make sure if you are comparing insurance premiums that you are comparing apples to apples.
6. Track your net worth
This is the one thing that I wish was emphasized in schools these days. Your net worth is as follows:
Assets – Debts = Net Worth
Assets would include a house, investments, vehicles, etc. Debt would include, but not limited to an auto loan, mortgage, student loans, personal loans, etc. The goal is to have your net worth go up. This may sound like common sense but when I was in my twenties I had a severely negative net worth. I had purchased two properties at the height of the market that were upside down, I had student loans, I had credit card debt and I even had a loan on a brand new Nissan Altima. I wasn’t tracking my net worth at all. Had I been, it is likely that I would have made drastically different decisions with my money. Now I use Personal Capital which is a free tool to view all of my accounts in one place and the best part is it shows you your net worth in real time as it is connected to all your financial institutions.
7. Pay Less for Your Cell Phone
From doing years of financial coaching, this is an area that I see a lot of people waste money. If you are paying more than $100 per month, you shouldn’t have to. We personally have T-Mobile and pay about $100 per month for two cell phones with data, unlimited talk and text. If you don’t use much data because your constantly connected to wifi, then consider checking out Republic Wireless that has plans as low as $5 per month.
As you can see there are several ways that you can improve your finances, many of which don’t involve changing your lifestyle at all. Make sure to take action today so that you can have less financial stress and more piece of mind sooner rather than later.
What are some ways you have improved your finances over the years?