Personal financial management is a subject that is not taught in many schools, but is something that nearly everyone has to deal with in their lives later on. Here are some statistics: Some 58% of Americans do not have a retirement plan in place for how they’ll manage their finances when they get old. While people generally believe they’ll need about $300,000 to support themselves in retirement, the average American has only about $25,000 saved at the time of retirement. Average household credit card debt among Americans now stands at a distressing $15,204. If these facts are alarming to you, and you want to reverse the trend, read on for specific, targeted advice geared towards giving you a better future. Here are some simple ways to manage your money better.
Simple Ways To Manage Your Money Better
Getting your budget back on track
If you’re spending more than you have coming in, you need to work out where you can cut back.
This could be as easy as making your lunch at home, or cancelling a gym membership you don’t use.
You could also keep a spending diary and keep a note of everything you buy in a month.
Or, if you do most of your spending with a bank card, look at last month’s bank statement and work out where your money is going.
Get everyone involved
Get everyone in your family involved with keeping to a budget.
Sit down together and make a plan that you can all stick to.
Work out how much spending money is available and agree between you what you’ll each have.
Cutting your household bills and your mortgage
For many of us, household bills make up a large chunk of our spending.
The good news is that it’s easy to save hundreds of pounds off your bills by following our tips.
Set Personal Priorities and Finance Goals
“I think it’s all about having goals,” says Timothy McGrath, a certified financial planner and managing partner with Riverpoint Wealth Management in Chicago. Defining what you’d like to achieve with your money can make the process of creating a viable budget much easier.
Invest and Save for Your Future
Investing is one of the simple ways to manage your money better. It’s time to shift your focus to money management for the long term.
Almost a third (29%) of older Americans have nothing saved for retirement.3 No 401(k). No individual retirement account (IRA). No pension. Nothing.
No matter how much or how little you have in your nest egg, the good news is you have tools available to start saving for your retirement right now. Whether you’re 25 or 55, it’s never too early or too late to start! Retirement is coming. You need to prepare for it.
Here’s how you can make sure you’re saving enough for retirement and staying on track to reach your retirement goals:
- Invest 15% of your gross income into tax-favored retirement accounts. If you get a 401(k) match at work, invest up to the match and then fund a Roth IRA. If you max out your Roth IRA and still haven’t reached your 15% goal, go back to your 401(k) and bump up your contribution until you do.
- Invest in good mutual funds. You’ll want to keep your investments spread out evenly between four mutual fund types: Growth, growth and income, aggressive growth and international.
- Work with a financial advisor. The stock market feels like a roller coaster sometimes, filled with ups and downs. But the only people who get hurt are those who jump off the ride. A financial advisor can walk you through the good times and the bad, and help you stay the course or make any necessary adjustments to reach your goals.
You don’t have to figure this out on your own. You can connect with a financial advisor who can help you go over your options so that you can feel confident with your investment choices.