Money Management Tips

If you’re anything like me, getting your finances in order has become a recurring New Year’s Resolution for the past ten years. However, I discovered the secret that not only got me off the cycle of financial havoc, but kept me off of it!

How did I do it?

I made it automatic.

You can do it too! If you follow the seven steps below, you too can be on your road to financial freedom.

Step 1: 401k it NOW! If your company offers a matching 401k plan, start investing in it immediately. Why? You’re company works you to the bone and now they’re giving you money. What could possibly be better? Let me explain it a little further. If you’re company offers up to match up to 4% of your salary to help you plan for your retirement and you give $100 a month, you’re company is going to give you $100 in return. Before you’ve even invested your money, you’ve already doubled it. So I’ll say it one more time…. 401K it now!

Step 2: Set up that emergency refund. The best way to open an emergency fund is to open an account with a bank like ING in which your money is not immediately accessible to you and they can take it out without the money every touching your hands. Let’s face it, if you were good at saving your money, you probably wouldn’t be reading this article right now.

Step 3: Fix that credit. I’m queen of automating it. So yes, you can set up automatic withdrawals from your checking account every single pay period so that not only are your payments on time, but you’re paying it off twice as quickly. If you’re like the old me and are only paying the minimum balance with the standard 14.99% interest rate, it will take over twenty years to pay off $1,000 balance. So…here’s what you need to do. First, see if you can get the interest rate on your card lower so that the money you’re paying off is actually showing. Second, ask for a credit increase so that your debt-to-income ratio is lower. The lower it is, the higher your credit. If you can’t get a credit increase, apply for one of those credit card mailings, but RIP up that card so you aren’t raising your debt. Lastly, automate those bill payments.

Step 4: Purchase that home. Everyone knows that one of the first signs to officially being middle class is owning your own home. But you don’t have to be rich to purchase your home. There are several programs such as Fannie Mae that helps first time home buyers purchase their home with as little as 3% down for your mortgage. This will be your biggest investment and will increase your net worth by hundreds of thousands. Of course, you want to go through step 3 before attempting step 4. Lowering your credit will guarantee you a lower interest rate on your home loan.

These four steps are the beginning to getting yourself off on the right financial footing. If you’re interested in doing more, here are a few accelerated steps once you’ve completed the basics.

1. Join an investment club and actively invest your money in stocks, Cd’s, and electronic
trading funds.
2. Purchase commercial property…Passive income (income that doesn’t require you do work) is
the best income you can have.
3. Do what you love for a profit – either open up a business or work part-time doing what you
love. It will make your life so much more fulfilling and put extra money in your pocket.

Now let’s get those finances in check! Good luck on your prosperous journey!