5 Financial Tips to Take Action On

5 Financial Tips to Take Action On

 

The clock struck midnight, the calendar turned to a new year and you may have even toasted with a glass of champagne. All of these are signals of the new year and most people rejoice because it’s time for some changes.

As we begin to fill the calendar pages of the year, think about what are your financial resolutions or financial goals? If you are struggling, don’t worry I have complied 5 financial tips to act on that will help with your personal finances every year.

Tip 1: Determine your Numbers, aka Calculate your Net Worth

When it comes to your personal finances, you need to know where you stand financially. If you are running a race, you need to know where the starting line is to get started so it is the same with your finances. Net worth can sound a little intimidating but it really isn’t. Basically, it’s a list of your assets (what you own) minus a list of your liabilities (what you owe). It is very important to know this number and at least review it yearly but I would go a step further and review it on a quarterly basis.  Examples of assets are your home, your car’s value, bank accounts balances, retirement accounts balance and stock values, etc. Liabilities are what you owe (simply put: all of your debt) to include: amount owed on mortgage, credit card debt, car loan debt, student loan debt, medical debt, etc. In the end, everyone aims to have a positive net worth.

Remember: Assets (what you own) – Liabilities (what you owe) = Net Worth

Tip 2: Check Your Credit Reports for Free and Review it in Detail.

There are 3 credit reporting bureaus: Experian, Equifax and Transunion. You are able to get a free credit report from all 3 by visiting: www.annualcreditreport.com. Your credit report will be free but if you want your credit score then you will have to pay additional for it. If you haven’t pulled your credit report in over a year, I would suggest pulling all 3 at once to comb over it for any errors or incorrect inaccurate information. Another option is to pull them periodically throughout the year. That would look like pulling one now (example: Experian), then 4 months later pull another (example: Equifax), then pull the final credit bureau report 4 months later (example: Transunion). This will allow you to view your credit reports throughout the year. If you choose to do this, please make a note on your calendar or in your phone to alert you when to pull them. Once you have your credit report there are 3 Things to look out for:

Fraudulent accounts

Incorrect account information

Incorrect personal information

If any of these are found – immediately follow the steps to contact the credit bureau and dispute the incorrect information.

Tip 3: Create S.M.A.R.T Financial Goals

With the information gathered from your net worth statement and credit report(s) its time to make some goals. Not just goals that sound good but actual goals that you plan to work to achieve. Achieving your financial goals could range from increasing your credit score to paying off debt or saving more money. Setting S.M.A.R.T goals is a popular practice that works like this:

S is for Specific – Make your goal specific. Be as specific as possible.

M is for Measurable – How will you measure and evaluate your goals?

A is for Achievable – Can you actually achieve this goal?

R is for Relevant – How is this goal relevant to you?

T – is for Time Bound – Tie this goal to a certain time. Example: 3 Months, 6 months, etc.

For example saving $1000 for a beginner emergency fund:

Specific: I will save $1000 by April 31st.

Measurable: I will save $350 in February, $350 in March and $300 in April.

Achievable: I will achieve this goal by creating a realistic budget and sticking to it, working overtime and minimizing my expenses in the areas of eating out and excess clothing shopping. All of my extra money will go towards my emergency savings account goal.

Relevant: I need to establish an emergency fund of at least $1000 in case of an emergency, this will prevent me from using my credit card and racking up additional credit card debt.

Time Bound: I will achieve this goal within 3 months.

Tip 4: Get an Accountability Partner

This is something a lot of people probably don’t consider but having an accountability partner is a great addition to your financial goals. You aren’t the only one with financial goals so call in some help with a friend, partner, spouse or even an online friend to hold each other accountable. This person will hold you to your goals and be a support system when you possibly feel like giving up. Lastly, an accountability partner could also push you to do more and achieve more.

Tip 5: Set Monthly Money Dates with Yourself.

At least once a month, have a standing date with yourself to review your finances and set up your budget or spending plan for the following month. Your money date shouldn’t be stressful and doesn’t have to take hours. A money date can be as short as thirty minutes. For example, set aside time on the first Sunday of the month to create your budget, review past spending, comb over bank transactions, view debt progress or review debt accumulated over the past month. Having this information in front of you will help determine what changes you need to make the following month or what you should possibly keep doing. This is also a time where you will review your progress on the S.M.A.R.T goals you set and perhaps a time to check in with your accountability partner to let them know your current successes or struggles.

To recap, Here are 5 financial tips to act on:

  1. Determine your net worth. (Assets – Liabilities = Net Worth)
  2. Check your credit report(s). (Access for free at www.annualcreditreport.com)
  3. Create S.M.A.R.T financial goals for 2019 (Smart, Measurable, Attainable, Relevant, Time Bound)
  4. Get an Accountability Partner (Call in a friend for some support)
  5. Set a Monthly Money Date with Yourself (At least once a month for 30 minutes)

Let me know in the comments, if you are already doing any of these or which one will you take action on first? Feel free to also share a goal with me.

Also, if you need an extra nudge to make your personal finances a priority, check out this post:

Permission Granted

 

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5 Awesome Financial Gifts for Kids

piggy bank

Between birthdays and holidays, it seems like there is always an occasion to buy a gift for a kid in your life. Planning ahead is the key to avoid giving gift cards or a toy that they will discard. Nothing against gift cards or toys if that is what the recipient wants but most cases, you could probably give a more intentional or thoughtful gift. Here are 5 awesome personal finance related gifts for kids.

Goalsetter

Goalsetter is a savings platform (FDIC Insured) where your kid can learn to save for things that matter to them. Or you can give a Goalcard – instead of a giftcard – to another lucky kid on a birthday or holiday and help them start saving toward something they care about.

Goalsetter gives the options to either “Start Saving” or to “Give a Gift”. You can sign up to start saving towards a goal for your child. Goals that jump out to me are: extracurricular activities, a bike, a computer, summer camp fees, high school graduation trip, college savings or college tuition/fees but a goal can be any goal you and your kid want to save for.

Once you finish setting up your kid’s account, you will get a personalized link to share with friends and family so they can give your child a GoalCard – real money to support real dreams.

If you choose “Give a Gift”, you can gift another kid a personalized GoalCard (even if they don’t have a Goalsetter account yet),  to help them achieve one of their goals. Goalsetter is a great option over buying a plastic toy that will likely be tossed away in a month or two.  Click here and here to learn more about Goalsetter.

Amina’s Bracelets: A kidpreneur story

What better gift to give than a book to inspire your child to become a kidprenuer. A kidprenuer is a kid that owns their own business. This book shows how Amina wanted a tablet but her parents wouldn’t buy it for her. Instead her parents empowered her to earn her own money to reach her goal. I think we can all agree that showing your child or any child that they have the ability to make their own money and have their own business is powerful. Consider giving this book as a gift to the special kid in your life. Consider purchasing “Amina’s Bracelets: A Kidpreneur Story” and learn more about the financial literacy company that created “Amina’s Bracelets: A Kidpreneur Story” here.

Moonjar Classic Moneybox: Save, Spend, Share

This twist on the classic piggybank grabbed my attention immediately. We all know that there are more steps to managing money than just earning it and spending it. Beyond earning and spending, you should also give. This moneybox separates the three areas: Save, Spend and Share/Give. If you are anything like me, you learned about money later in life and wish you learned it earlier. The Moonjar Classic Moneybox is a great gift to give to show a child how to divide money into those three areas. This gift will help the special child in your life learn about money.

Cash or Play Money

I think we can all agree that cash is still king. Eventhough it seems that we are moving away from using cash as often, cash is still being used and kids need to know how to count and handle cash and coins. If the child is too young to handle real cash then you can give them play money for them to get used to recognizing money and counting.

Communication

The gift of communication is priceless and can be combined with any of the gifts above. I urge parents, grandparents, aunts, uncles, or any financially empowered person to have a conversation with the children in their life to talk about money. Money is still such a taboo topic but if you know have learned something about money that would help someone else, especially a young person in your life then have that talk. On the flip side, if you have older kids or adult children but need to talk to them about the family finances like retirement, insurance, etc. then have that talk. Any day is a good day to talk about money.

Have you ever given a financial gift to a child? What financial gift do you wish you received as a child?

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