I recently had a conference with our financial advisor to reassess where we are and get some things taken care of. As I was speaking with him, I couldn’t help but think of what we have learned when in comes to finances in our marriage and life. There are so many components to financial stability or success, and honestly it can be overwhelming to know where to even start. I thought I would share my top 10 tips for this current stage of life. This post will go over the fist 5. Stay tuned for the remainder! I would love to know what your family does!
Disclaimer: I am not a professional! These are things I have learned in my twenties that have been beneficial for our family. If you are serious about changing your finances, please seek a professional. They are amazing at what they do!
1.Complete an overall assessment or analysis of your current situation.
Look at anything and everything…monthly take-home, monthly bills/spending, savings accounts, investments, retirements, debt (home, car, student loans, credit cards, etc.). This will give you a big picture of where you are and what your finances look like. It also may be an eye opener and good to visually see/discuss.
2.Prioritize your TOP 2 goals.
This is hard because you will want to do many things at once, but that is extremely difficult to do and somewhat unrealistic. Choose your top 2 financial goals as a family depending on what is most important. Once you have set two goals, make a PLAN. It will not magically happen. Take the time to figure out what steps you need to take to make it a reality.
3.Think long term.
It is hard to think long term when our society is based on instant gratification, but when it comes to finances, thinking long term is so important! Look at any retirement accounts you currently have through your employer and what your monthly contributions are. Many will have a 401k, however when I taught in public schools I had two similar accounts that were different (TRS/457B). Assess how much you want to contribute, consider the percentage your employer will match, and have it directly taken out.
You may also consider an additional retirement account, such as a Roth. We both contribute monthly to these.
4.Treat it like a bill.
Whatever your goal is and you are trying to accomplish, treat those payments like any other bill. Set them up on auto-draft and do not make excuses to not get them paid. We would never consider skipping a phone or internet bill! Create a mental shift where those goals are a priority and you are taking the needed steps to reach them. This may mean cutting out certain things from other areas of your spending.
5.Create an emergency fund!
This is so important to establish because we ALL know life throws curve balls! Try to save 3 months of your monthly household income. If you own a home consider doubling that amount. Once you have reached your goal only use it for intended purposes! We do not even consider this amount as part of our savings to spend.
Do you do any of these things? What has worked best for you or your family? The other 5 tips will be coming soon!