Empower Blog

August 31, 2021

25 Quick Tips for Managing Your Finances

Sometimes the hardest part about tackling your finances is knowing where to start. So, we've rounded up 25 helpful tips on a variety of topics, from saving and spending to budgeting and retirement, to give you a place to begin managing your financial journey.

General

1. Note Important Dates – If you have trouble remembering recurring dates such as bill or payment due dates, periodic tax deadlines or even annual credit checks, set some time aside to enter them into your favorite calendar app for the year.

2. Know Your Rates – Always pay attention to interest rates to help you choose which credit card to open, which savings account will earn you the most on your balance and which debt you should work towards paying off first.

3. Understand Your Net Worth – This number, which is the difference between your assets and debt, can help you determine where you stand financially. Keep track of it over time to follow how you're progressing toward your financial goals.

Budgeting

4. Go Cash Only for a Short Period of Time – Try making all of your discretionary purchases with only cash for a small set period of time, such as over a weekend or a week or two. Having to physically part with cash can help you reign in spending and better understand how and where you spend money.

5. Put About 30% Toward Non-Essentials – Giving yourself 30% of your take home income to spend on wants instead of needs will allow you to save and cover the essentials while still being able to enjoy yourself.

6. Do a Daily Money Minute – As simple as it sounds, spend 60 seconds each day doing a check in on your transaction history and various accounts to keep your financial priorities top of mind.

7. Set Specific Goals – Avoid coming up with vague ideas with no parameters, but instead, set goals with specific numbers and concrete dates to hold you accountable and stay on track.

8. Start Small – While big goals are great, smaller ones can help you build momentum and give you a boost as you achieve them. So, try including some smaller, short-term goals, like limiting yourself to one lunch out per week or saving for an upcoming trip.

Saving

9. Add Savings to Your Monthly Budget – Just like planning for non-essential spending, you should also include a percentage of your gross pay for savings in your budget, start by trying for around 20%.

10. Keep Your Savings Separate – Set up a savings account that's separate from your checking, so you'll be less likely to inadvertently spend it.

11. Direct Deposit Isn't Just for Checking – You can also set up a percentage of your direct deposit to funnel into your savings account, allowing you to bypass any opportunity to spend it and grow your savings more steadily.

12. Take Advantage of a Good Interest Rate - The higher the interest rate on your savings account, the more your savings will grow over time.

13. Understand What Counts as an Emergency – Before dipping into emergency savings, consider if your reason is truly a financial emergency. Examples include losing your job, a medical emergency, your car breaking down or an emergency home expense.

14. Don't Let Your Savings Sit – If you have more than six month's savings (or an amount you feel comfortable with) in your emergency fund, think about investing some of your savings. If you're new to investing, our Wealth Advisors can help you get started.

15. Get Insured – Ensuring you have the right amount of insurance coverage for your home, auto, life and other valuables can help save you money in the event of an emergency. Consider setting up a free life insurance policy evaluation with us to better understand your life insurance needs.

Spending

16. Spend on Experiences Not Things – Use your splurges for experiences that will provide lasting memories rather than material items you'd be more likely to forget about or cast aside after a few uses.

17. Shop Solo – Avoid peer pressure to make purchases you might later regret by shopping alone rather than with a group. As a bonus, find other fun, free things to do with your friends, such as a picnic in the park.

18. Aim to Spend No More than 10% of Your Monthly Income on Transportation Expenses – Try to keep your monthly auto costs below 10-15% of your monthly take home pay. And don’t forget to factor in other car-related expenses beyond a car payment, such as maintenance, gas, insurance and more.

19. Shoot for Mortgage Payments Below 28% of Your Monthly Income – Use this as a helpful rule of thumb when you're trying to determine how much house you can afford. You can also try our handy home affordability calculator.

Retirement

20. Start Sooner Rather Than Later – Don't put off your retirement savings. The sooner you start contributing, the more time your savings will have to grow by the time you retire thanks to compound interest.

21. Avoid Cashing Out Your Retirement Early – Not only would you take your savings away for future use, but you'd also decrease your earning potential with compound interest. Plus, you're often penalized for early withdrawal and will have to pay taxes on money you withdraw.

22. Harness the Power of the Company Match – Don't leave money sitting on the table. If your employer offers a match to your retirement savings, be sure to contribute at least that much, if you can, in order to take full advantage.

23. Increase Your Contributions with Income – Pay yourself first. Whenever you get a raise, aim to also bump up your percentage of income going into retirement, if possible, so that your savings will be better equipped to match your retirement lifestyle expectations.

Credit

24. Review Regularly – Keep track of any fluctuations in your credit score and get a full report at least annually. Be sure to report any errors or unusual activity as soon as possible.

25. Aim to Use Less Than 30% of Your Total Available Credit – This percentage is called your credit utilization rate and going over it can negatively impact your credit score.

We hope you found these tips useful, and if you'd like to learn more, you can check out our other blog posts on a variety of financial subjects, our financial calculators and contact information if you'd like to get in touch with one of our Wealth Advisors.

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About the Author
CommunityAmerica Author
Wealth Management by CommunityAmerica

Wealth Management by CommunityAmerica is rooted in helping individuals, business owners and families with financial and investment planning to help them achieve a financial peace of mind. At the center of our Wealth Management practice is a focus on you, the member.

This document contains links to third party sources. Although we believe these third-party sources to be reliable, the authors make no representations as to the accuracy or completeness of any information derived from such third-party sources and take no responsibility therefore. Links to third party sites are for your convenience. Each site is subject to its own terms of service and privacy policy independent of CuFi. Unless otherwise stated, CuFi is not affiliated with any site to which this article links to.

Securities and advisory services offered through Copper Financial Network, LLC (“CuFi”), Member FINRA/SIPC. CuFi is a SEC registered investment adviser. CuFi is a wholly-owned subsidiary of CommunityAmerica Credit Union. Wealth Management by CommunityAmerica is a marketing name used by CuFi. For important disclosures from CuFi, including our Form CRS, please visit here.

Life Insurance products are offered by Copper Financial Network, LLC (“CuFi”), in its capacity as an insurance agency. Other insurance products may be sold through CommunityAmerica Insurance Agency, LLC, a wholly owned subsidiary of CommunityAmerica CUSO One, LLC and a licensed insurance agency in Missouri and Kansas. CuFi Insurance Advisors are only authorized to offer non-securities insurance products. CuFi is a wholly-owned subsidiary of CommunityAmerica Credit Union.


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