Financial Planning Tips: 5 Small Steps for a Bright Future
Just like most areas in life, financial success requires strategy and planning. And when it comes to financial planning, it can be hard to know where to drive if you’re new to the road.
Financial planning is the key to financial wellness, not just today but well into retirement, too. With these five beginner-friendly financial-planning tips, you’ll feel confident planning for the future.
1. Avoid Temptation
If you can’t leave your favorite store without buying something, or you’re easily persuaded by online or television ads, do your best to recognize and avoid these triggers for temptation. Avoid the outlets that drain your bank account to give yourself a chance to start saving.
Make a list of free (or cheaper) alternative activities or hobbies that are just as enjoyable. Next time you’re tempted to fall back into an unnecessary-spending trap, look at your list and choose a free activity that will satisfy the craving for stimulation—and allow you to start saving money.
2. Always Make a Shopping List
Before you go to the grocery store or go shopping for household items, always make a list of the necessities before you go. Considering the items you absolutely need will help you rule out things you don’t—so you don’t end up overspending.
In addition to listing necessities, give yourself a budget for each trip. If you plan on spending no more than $100 on your weekly grocery trip, you’re less likely to splurge on extra ingredients you don’t need.
3. Automatic Savings
Set an automatic transfer to your savings account from your checking account every month (or week or quarter, depending on how aggressively you want to save). This can help you save at least a small amount every month without even thinking about it.
Automatic transfer can usually be done through your online account portal, or you can meet with a teller to set this up for you.
4. 30-Day Rule
If you’re trying to save money but an item at the store catches your eye, try a 30-day rule.
Wait 30 days before you allow yourself to buy that desired item. If, after that time, it’s still calling you, take another look at your budget and decide if you can afford it.
Chances are, if you’re a bit of an overspender, once the impulse for the item fades, you’ll be able to refocus on your financial plan and keep saving instead of spending.
5. Reward Yourself
Learning to be a good saver doesn’t have to mean being a penny-pincher. Though it might seem counterintuitive, once you achieve the financial goals you set for the week or the month, reward yourself.
Giving yourself incentives will motivate you to stay focused on your financial plan. Rewarding yourself will also help you put more value on the things you purchase, as you will see them as achievements rather than unnecessary splurges. Just don’t get too carried away—choose a reward that won’t derail your financial plan for the month.
If you’re close to retirement and need a little extra boost for your savings, check out this quick and easy financial advice.