August, 2022
Are you winging it when it comes to your finances?
If you are, you need a budget. A budget is a plan for managing income and expenses. Setting achievable financial goals can help you budget successfully and prioritize your finances. Setting goals also keeps you motivated to stay on track and resist the urge to spend on unnecessary items.
HOW TO GET STARTED
Read about personal finances
Visit your local bookstore (or download a digital copy) for a popular money book. A simple Google search will reveal the top bestselling personal finance books right now. Easier still, follow us on our Facebook page (Dan Polizzotti – Acorn Financial Services) for regular tips on various topics.
Track your net worth
Your net worth represents the sum total of your entire financial life. It shows you all of the assets you’ve accumulated as well as all of your current debts. You net worth is not just your annual income, it’s also all of your financial accounts (e.g., checking, savings, investments, and retirement accounts), your real estate and your businesses. Once you’ve tracked your assets and your liabilities, it’s important to monitor any changes over time as well as make financial goals.
Track your spending
Talk about a real financial awakening! Some of your expenses are necessary and those will likely be static amounts – mortgage payment, car payment, cable bill. But some of your expenses will have fluctuating amounts, and some of them might be superfluous. Tracking your spending takes a bit of legwork but whether you use an excel spreadsheet or special software, once you see how much you actually spend on food, entertainment and extras every month you will be able to make some informed decisions. The key to this is being honest. How many mornings do you hit Starbucks on your way in to work? Are you making the most of that gym membership?
Smarten up your credit score
Pay your credit card balances strategically and ON TIME. A credit card payment that is more than 30 days past due can knock as many as 100 points off your credit score. Consider setting up auto pay for one bill that you’ve been late on this past year. Ask for higher credit limits. Increasing a credit card limit lowers your credit utilization ratio which can boost your credit score. This can be a better choice than taking out a new credit card as that shortens your credit history and can decrease your credit score. Dispute credit report errors and use a secured card.
Invest in yourself
Personal development is a great way to invest some of your money as new skills or certifications can lead to higher pay and/or better job prospects. Sometimes you have to spend a little money to make money. So, take a class or a workshop. Hire a business or a career coach. Turn a hobby into a side hustle. Most importantly read, watch, and listen as much as you can.
Network
Connect with people. On the lacrosse field, on social media, or at an organized networking event, you never know when a new relationship can lead to a new opportunity. Whether it’s a referral, a partnership or a request for your service or product, it is important to be prepared. Networking isn’t just a one-way street. If someone in your network matches up with someone you meet at an event, don’t hesitate to make that connection as it will only strengthen your relationship – with both parties.
Focus on what you can control
While you can’t control the ups and downs of the stock market, you can control how much you invest. And, while you can’t always control your paycheck, you can control how much you spend.
Meet with a financial advisor
Remember, the more you know, the more you can save.
We can help.