Managing money is something we all strive to continuously improve upon. They are always newer, bigger, and better financial goals to set for yourself. Yet, many of us don’t feel confident in our ability to be financially savvy or to stick to resolutions regarding finances. The new year is typically a prime time to set new goals, but all the advice out there can be overwhelming and deter you. There are apps, articles, social media accounts, books, etc. Instead of wading into the abyss, we have a few recommendations for you start off 2020 with to boost your financial confidence before you start any other financial journeys. These recommendation concepts are drawn and expanded upon from a recent article from Nerd Wallet, “6 Empowering Money Moves to Boost Your Financial Confidence”. These tips are not only ones that we encourage you to practice, but also your loved ones (think recent or soon to be graduates). We are only going to highlight a few of their 6 “money moves”, but feel free to give the article a read if you want to see the others!
The first money move that Nerd Wallet suggests is tracking your spending for one month. This is a suggestion we have made in the past, but we can’t emphasize enough how helpful this can be. Tracking your spending habits for a month, or if you’re an overachiever, two, enables you to understand where your money is going. You can identify necessary expenses, excess expenses, and see how the little purchases are adding up. Tracking your spending empowers you to make more informed decisions about expenses you want to cut, allows you to reallocate money, or set budgets for certain categories. You’ll be able to give yourself direction when it comes to laying out a budget and your financial goals.
Another suggestion is increasing your credit score. Credit scores can be a bit elusive and frustrating, but it can be worth taking a couple of positive steps. Before you do this though, make sure you know your score! Credit Karma is a very popular option because you can use their website or app to track your credit without it effecting your score. Many credit card companies also offer score reporting, so log into your account and see if it’s available. The first thing to do regarding your credit score is to check your credit report for errors and dispute any with the specific credit bureau that is misreporting. Secondly, work on lowering your credit utilization, the amount of your card limit that you use. You can do this by either requesting a credit line increase of by paying cards down.
Nerd Wallet also suggests switching to a high-yield savings account. This can be a smart choice because it you’re already saving money, then you might as well make your savings work for you. Regardless if you do this or not, at least set aside some time to examine your assets and the financial institutions they are held with. Are you maximizing opportunities? Maybe you should consider opening a new savings account, or maybe you should close accounts with certain institutions because they are not “friendly”. Working with “friendly” institutions, as we’ve coined them, is something we have talked about, and a concept our clients are quite familiar with. At Family Estate Planning Law Group, we keep an updated list of friendly institutions who are accommodating and easy to work with when it comes to making changes to your assets and aligning them consistent with your estate plan. Friendly institutions also ease the burden on your loved ones after your death.
Lastly, plan for the predicted expenses. After taking a month to track your expenses, you can plan for the ones that are necessary, but in addition to what you learn from your tracking, you should look at what you own and think about costs you could anticipate. This might be car related expenses, insurance payments, setting up a health care and prescription budget, home expenses that might arise, etc. If you are able to set aside funds for predicted expenses, the burdened will be lightened
These financial steps will build your confidence and set you up for a better financial future, which in turn sets up your loved ones for a better financial future because you will be able to leave more behind to take care of them. Don’t feel like you have to approach financial planning alone though. At Family Estate Planning Law Group, we can help you determine friendly institutions and we can connect you to a financial advisor. Having a financial advisor is always a wise choice, especially as you consider money moves to make to prepare for retirement or assisting children with student debt. Or if you yourself have debt, financial advisors are wonderful resources for tackling your debt and making smart investments.
Take some time at the beginning of this year to work on boosting your financial confidence, because newer, bigger, and better goals are within reach, like having a comfortable retirement or investing in a second home for your family to enjoy for years and generations to come.