On Day 13, we had you put together your vision board. It’s amazing, isn’t it—to see everything you’ve ever wanted, lined up in front of you on paper. It makes you want that future even more. However, for many of us, there are plenty of deterrents that block our path. Perhaps the biggest one? MONEY.
Many of us have money management issues, and it makes sense. With bills and obligations and debt, it can all be so overwhelming—like little cash goblins are hiding in every shadow, just waiting for the opportunity to snatch your last $20. It can get rough, we know, however there are things you can do to make it just a bit easier! Here are some techniques and tips that can help.
A lot of people think that debt is best paid from big to small—meaning, take down your debt with the highest interest rate first as opposed to the smallest. In actuality, that method can get exhausting and overwhelming. If the debt is big enough, it’s like you’re running in quicksand. It’s better to start small. This will keep you motivated until you’ve paid them all. It gives you the ability to cross things off your list, so you can feel accomplished and inspired to keep moving forward. Also, before you start paying off debt, get $1,000 into savings. Otherwise, you’re likely to just rack that credit card back up the second something unexpected comes up.
Saving doesn’t have to be a huge chunk at a time. You can also go piece by piece. In any instance, it’s important to clarify what you’re saving for—this will help you determine your rate of savings and the amount you put away. Think of it as a 3-tier structure: short-term savings (like travel expenses or holiday gifts), moderate savings (like a new washing machine, emergency funds and down payments) and lifetime savings (retirement). It’s suggested that 20 percent of each paycheck should go toward savings—which type of savings is up to your discretion and your immediate and long-term goals. If a 20 percent savings rate isn’t a possibility for you right now, we recommend consulting a financial planner! They’ll be able to help you figure out your options. There are also plenty of digital resources out there; the Qapital app allows you to shave bits and pieces off of your income in a wide range of payment options, and you won’t even notice it missing.
When just starting out, investing also works best on a piece-by-piece basis. If you’re lucky enough to work at a company that offers a 401k, get enrolled immediately! You’ll be able to control the money going in and out, so managing becomes more doable. When deciding which businesses, products and services to invest your money into, consider your age bracket. For younger folks who have a while until retirement, it’s best to put money in higher risk investments, as there’s plenty of time for your decisions to iron out. However, for those who are older, more stable stocks are a better option. If you’re just getting started, the Acorns app, much like the Qapital app mentioned above, can be used to shave off small portions of your money for investment purposes—every dollar you invest is automatically spread across 7,000 stocks and bonds to help improve your return while reducing risk!
Assess whether you need to clear debt, save more or invest your money. If you’re in debt mode, check out Dave Ramsey’s book, Total Money Makeover (or if listening is more your style, find it on Audible). If you’re in savings mode, create a budget and come up with a plan to squirrel away money every day, week or month. And finally, regardless of what investment stage you’re in, consider setting up a consultation with a financial planner.