With April being Financial Literacy Month, what a great time to share some financial concepts with you so you can have your money working hard for you.
We want you to know that you can take complete control of your money and master the financial game, but you need to know the rules. If you dont know how to play Uno and go against a player who knows the rules, you will lose every time. This concept applies to everything in life, including how you handle your money.
So here are some tips on how to take control of your finances starting today.
Know where your money is going
It is impossible to manage your money if you don’t know where it’s going. So, track it down, know how much you’re spending every month, and what you are spending it on. Consistently checking your bank statements can serve as a reality check. Do you know what you are spending? Or do you pay bills and spend the rest? Tracking your spending is an essential step in taking control of your finances. Track your spending for 30 days. Doing this will give you a better idea of where your money is going. Take 30 days and track every penny you spend and what you spend it on. Download a copy here.
30-day-money-trackerDownload
Know where your money is…
Funny, but most people don’t even know where their money is. Is it in a 401K? Well, when did you stop working for that company? Even worse, when you ask wives where they keep their investments and accounts. They have no idea because their husbands take care of all of it. You need to know where your money is. I remember thinking that I had savings only to find out my husband never saved anything, and I was crying in a closet finding out we had nothing.
Interesting fact: The website fltreasurehunt.gov mentions that one in five Floridians have unclaimed funds from a forgotten financial account.
Know your Financial Independence Number
Most people are looking forward to retirement but have no idea how much money they need. It’s good you’re at least saving and investing money, but not knowing how much to shoot for is like walking in the dark. You might get to where you’re going, but it won’t be easy. Know your financial independence number. A survey shows that 52 percent of American workers say theirretirement savings are not where they need to be. Be in the know about your retirement needs.
Know how much you need for emergency
We have heard, 6 months or 12 months, have you ever sat down and calculated your own emergency savings needs? Again, you can be saving for it, but not knowing how much you need is like shooting in the dark; you’re guarantee to miss your target. Here a worksheet to calculate you own emergency needs.
Emergency_fund-fillDownload
Know how much life insurance is needed
I have a riddle for you: “You don’t want me until you need me; when you need me, it’s too late. What’s my name?”
I have heard and agree with the saying, “It’s better to have life insurance and not need it than to need it and not have it.” If you love them, protect them. I always tell my husband that most people don’t treat your kids well while you’re alive; imagine dying and leaving no money. About half of all U.S. households carry less life insurance than they should? Most people usually overestimate the cost of term life coverage. Half the population estimates the cost of life insurance at more than three times the actual cost. According to LIMRA’s2020 Insurance Barometer Study.
How much interest you’re getting on your money
Compound interest refers to both the interest you earn on the money you’ve saved or invested and the interest you’ve made on your interest. It’s imperative to know how much interest you are earning. Familiarize yourself with the rule of 72. Be in the know!
Protect your assets
Get a living will. The laws of each state designate how your estate will be distributed when you die if you dont have a living will. Prevent your family the pain and time it takes to sort this things out by having a living will. Make sure your documents are legal according to your state. Also, it’s crucial to have all documents in one place and at least have copies with a family member you trust to take care of your assets. Documents such as trust, will, advanced directive, beneficiary deeds, powers of attorney, and funeral plans.
Okay, we shared lots. If you want more information, send us a message. Are you perhaps looking for ways to earn extra income to start investing but not sure where to start? Check out this post on nine ways to earn extra cash. Read more here.
Until next time, enjoy saving.
Money & investment Disclaimer
All pieces of advice from the website are our opinion. We are not financial or estate planners, tax advisors, budget planners, credit counselors, lawyers, or debt managers. For related advice, individuals should consult an appropriately licensed professional. Before investing, an investor should consider a mutual fund’s risks, investment objectives, and fee expenses. All tax rates and interest percentages are hypothetical. Savings and CD accounts are generally FDIC insured up to $250,000. The creators, producers, participants, and distributors disclaim any liability or loss arising from advice herein.
