People with financial plans are good at saving, spending, and investing states Vincent Camarda. They have a handle on their income and expenses, know what they have in their bank accounts and retirement accounts, and they can identify opportunities to save more money. If you want to be more financially savvy like these people, here are five habits that can help:
they know how much they make and spend
Knowing your income and expenses is the first step to planning your finances. Knowing how much you make and spend will help you determine where to start saving, and how much money you can afford to save.
they save early and often
It’s important to save as much as you can. You should also save early, because the earlier you start saving, the more time your money has to grow. And don’t be afraid to put money into different types of accounts—savings, CDs, mutual funds and stock market investments are all good ways to diversify your portfolio and maximize growth potential.
they’re smart with credit
Credit cards can be a great tool if you use them wisely, but they can also be a trap. If you don’t have a financial plan, it’s easy to get in over your head with credit cards and never dig yourself out of debt. However, those who create and stick to their financial plans know how to use credit cards for the good of their long-term financial health by using them only when necessary and paying off all balances each month. They also always keep their outstanding balance under 30% of their total credit limit so that they avoid high interest rates on balances carried from month to month.
they know they can ask for help
You don’t have to do everything yourself.
- You can ask for help from friends and family.
- There are lots of financial professionals who can help you, including those at nonprofit credit unions, community development banks and even your local library.
they’re set up for retirement
People with financial plans are set up for retirement. They have a plan in place and it’s working for them. They have a financial advisor and they also have at least one retirement account, if not multiple ones.
When I meet with clients, I always ask them if they have a financial advisor or someone who has guided them through the process of building their plan. In my experience, most people don’t have a financial advisor but would like to one day hire one when they feel more financially stable or confident in their decisions. This is what makes sense: no matter how much money we make or how smart we think we are (or aren’t), having someone who specializes in this area could be beneficial because they see patterns that we might not notice ourselves just yet or at all!
Conclusion
A financial plan is more than just an over-arching document that lays out your goals and strategies. It’s a way of life, one in which you make the most of your assets, save for tomorrow’s expenses and pay down debt today so that you can retire with peace of mind. If this sounds like something you want to do, it may be time for a financial checkup—and we’re here to help!
