No matter how much we think we do, we don’t always have all of the right answers when it comes to the finances, and since handling the household finances is a huge job, it’s always a good idea to bounce ideas off your successful family and friends, not to mention a professional, to make sure you that you are set up for success. The longer you wait, the more you could be running the risk of sinking into debt and not having enough to life off of in retirement, so the faster you can adopt smart money moves, the better.
Whether that is in the form of a budget, or at least reviewing every single charge made the previous month, it’s always a good idea to stay organized so that you know every dollar that is coming in, and going out. If you take last month’s credit or debit card statement, you can review every item, line by line, and try circling items that could have been avoided, such as eating out, and see what you could have saved otherwise, you will probably be surprised. From there, you can work to allocate a set amount of funds for the monthly necessary purchases.
Monitor Net Worth
It can sound a little morbid, thinking about how much you are worth, but it’s a good idea to check even every few months to make sure that your net worth is trending upwards instead of down. If you take all of your assets, such as cash or home, then subtract your liabilities such as mortgage and credit cards, the remaining balance will be what your net worth is. As you continue to pay down debt and hopefully accumulate assets, you will continue to see that rise, hopefully maxing out as you are ready to retire from the workforce.
Using multiple cards and accounts can be difficult to not only keep up with, but could be missing out on advantages by using a credit card for all purchases. Not only is fraud protection important, especially now where you can get your card info ripped off at the gas pump, paying a tab, or even through a department store hack. At least with a credit card you lose the risk of having your bank account wiped out if it were with a debit card, while you sort out the disputing process.
You never know what life will throw at you, so it’s always a good idea to be as prepared as you can, for the unexpected. Whether it is an expensive vet bill, having to fix your car, or needing to replace the furnace, instead of putting on a credit card and risk going deep into debt, not to mention paying interest on that, if you can put a few months’ worth of expenses in an account, you can have that cushion if any unexpected charges do come in. You just don’t want to have too much in that account sitting, otherwise it could be making more in interest in other sources other than a savings account.