If you have never taken the time to really examine your financial life and look at where you are at and where you want to go, now is a good time as any to do. The sooner you take control of your financial life, the sooner you will start to enjoy more financial success.
Tip #1: Write Down Your Debt
First, you are going to want to write down all of your debt. You will want to write down who you owe the debt to, the total amount you owe, the interest rate for the debt, the amount for a minimum payment, and the loan length.
Writing down all of your debt will allow you to visualize what you have to pay off to become debt-free. Seeing your debt written down will also allow you to make smart decisions about what to pay off first.
Maybe you have a loan whose interest rate is double that of your other debt; you may want to focus on paying that off first. Or perhaps you have a few credit card accounts that you owe less than a thousand dollars on. If you pay these down first, it will greatly help your credit score.
Seeing your debt can help you make a better plan to get rid of it.
Tip #2: Add Up Your Assets
Second, you need to see what, if any, assets you have. Assets include things like your paid-off car, the equity in your home, or your retirement savings account. Adding up your assets will allow you to see what you own in full and how you are investing and saving money for your future.
Being able to see your assets, or lack thereof will help you develop a better plan to maximize and increase your assets.
Tip #3: Make a Savings Plan
Third, you need to start making a savings plan and be sure to automate it so that you don't forget. It is important to pay yourself, which you are doing when you save your money.
You are going to want to build up an emergency fund first. An emergency fund allows you to have the cash to deal with unexpected emergencies, like when your water heater breaks or your car needs a new oxygen sensor. Having an emergency fund allows you to pay for those emergencies without going into debt.
You will also want to invest in your future via a retirement account or other investment means. You are going to want to decide how you want to invest in your future. If you have a matching retirement account at work, use that.
Tip #4: Learn About Finances
Fourth, you need to start to become savvy about your financial life. Spend at least an hour a week learning about finances. You can read books, blogs, watch videos, or listen to podcasts that will teach you more about managing and investing your money. Being well informed on financial matters will help to improve your life.
If you want to get in charge of your financials for the first time, you will need to write down your debts and assets to assess how you are handling both of these things and come up with a plan to do better. You also need to make a savings plan and invest time to learn more about financial planning.
For more information, contact a financial planning service, like TFG Wealth Management.