Here are the top 9 crazy-easy mid-year money moves you can do yourself!
Do-it-yourself money moves
Look forward 6 months. What have you got coming up that you need to pay for? A vacation? Um, the holidays? Start deciding how much you want to spend and start stashing that away…for example, if I decided to spend $3,000 on gifts and travel by in December, I should be setting aside $600 per month ($3,000 / 5 months = $600) if I haven’t started sooner).
Extra credit: While you’re at it, look out 12 months and calculate how much you need to save ongoing (I always find that if you save at least $500 per month into cash, that takes care of a lot of it.
Save anyway. How much are you saving into cash, right now? To be “financially fragile,” is to be unable to come up with $2,000 in 30 days, in the case of an emergency. And, according to a study by the National Bureau of Economic Research, nearly half of Americans fall into that category. Even if you can only save $25 per month, you MUST start a cash reserve. Try to keep this separate from normal monthly expenses and day-to-day checking, like an online, high-yield savings account.
Remove “slush” from checking. You know how, after some time passes, you suddenly have a bunch of extra money hanging out in your checking account? This is a good thing…it means you spend less than you earn. But it’s a good practice to shift that slush (you can keep some in there!) into something earning a little bit better interest.
Dial up the debt payment. If you’re trying to pay off a balance, go back every 6 months and increase your debt payment by $5-$25. Most people don’t even miss that amount in their monthly spending, but it can shave months off your debt payment schedule.
Review your monthly bills. Is there a monthly bill you’re wasting money on? When I review spending for clients, I’m always asking, “What’s that?” and they say, “Oh, that’s something I used to do (gym, subscription, online membership, etc.).” If you’re not getting value out of it, stop the automatic pull.
Get out of the market. Do you need to use the money that’s invested in the stock or bond market in the next 6 months or so? That money should get out of the market and be parked in cash (so it’s there when you want it).
Rejig 401k savings. Most of the time, I find people can be more aggressive with their investment allocation, especially if they have more than 10 years to retirement. Take a moment to decide (and, if need be, contact your 401k rep to talk investments).
Automate Your Charitable Giving. It’s so much easier to have my charities take out, say, $25 per month than it is to write them a check for $300 once a year (I’m lazy). Virtually ALL charities have this option now, starting as low as $5 per month. You feel so proud of yourself after this step (and won’t hate how you’re trying to catch up with everybody in December)!
Ask Yourself The Question. Do you need a financial planner? You might be wondering how long it’s going to take to pay off your debt, or how to best allocate your 401k, or even if the 401k is the best place for you to be saving. Many people feel a lack of clarity over the connection between what they do now, and how that translates into their imagined (desired) future. A financial planner can answer any and all of these questions for you (and more)! But better yet, you won’t have that nagging uncertainty that you’re not making the most of your money.
When you become aware of how you interact with money, saving it is much easier (and actually fun). Download my free ebook, Getting Started With Conscious Spending that comes with 4 less-than-5-minute videos on how to get started on Mint simply.
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