Money is a tool and every dollar you own should be working for you 24/7 β Every dollar is an employee and needs to be given a job.
If you want to be better with money, prioritize this 10-step financial plan:
If you want to be better with money, prioritize this 10-step financial plan:
Step 1) Figure out where your money is going:
Create a budget to see where your money is going and make better-informed decisions about your spending.
A budget is a plan for your money that outlines your income and expenses.
A budget is a plan for each dollar.
Create a budget to see where your money is going and make better-informed decisions about your spending.
A budget is a plan for your money that outlines your income and expenses.
A budget is a plan for each dollar.
Step 2) Build a 1-month emergency fund:
An emergency fund is a safety cushion to cover unexpected expenses such as car repairs, medical bills, or job loss.
Without an emergency fund, you are forced to rely on high-interest credit card debt.
Put your emergency fund in a HYSA.
An emergency fund is a safety cushion to cover unexpected expenses such as car repairs, medical bills, or job loss.
Without an emergency fund, you are forced to rely on high-interest credit card debt.
Put your emergency fund in a HYSA.
Step 3) Maximize your employer 401k matches so "free money" can compound:
A 401k match is free money from your employer, which grows tax-free until you withdraw it.
This will result in a substantial amount of money over time due to the power of compound interest.
A 401k match is free money from your employer, which grows tax-free until you withdraw it.
This will result in a substantial amount of money over time due to the power of compound interest.
Step 4) Pay off high-interest consumer debt:
High-interest consumer debt, such as credit card debt or personal loans, can spiral out of control
The longer you carry debt, the more you pay in interest & fees
High debt also negatively impacts your credit score and creates stress
High-interest consumer debt, such as credit card debt or personal loans, can spiral out of control
The longer you carry debt, the more you pay in interest & fees
High debt also negatively impacts your credit score and creates stress
Step 5) Save 3-6 months of expenses in your emergency fund:
A 1-month emergency fund helps with short-term unexpected expenses, but 3 to 6 months provides peace of mind to cover essential living expenses like rent/mortgage, utilities, groceries, transportation, and insurance.
A 1-month emergency fund helps with short-term unexpected expenses, but 3 to 6 months provides peace of mind to cover essential living expenses like rent/mortgage, utilities, groceries, transportation, and insurance.
Step 6) Maximize your Roth IRA contributions for retirement:
A Roth IRA can make you a tax-free millionaire, it's the ultimate tax loophole
Investing $100 a week into your Roth IRA with an S&P 500 Index Fund will change your life
Aim to contribute the maximum, $6,500 per year
A Roth IRA can make you a tax-free millionaire, it's the ultimate tax loophole
Investing $100 a week into your Roth IRA with an S&P 500 Index Fund will change your life
Aim to contribute the maximum, $6,500 per year
Step 7) In total, invest 15% of your income for retirement:
The 15% overall investing goal is a general guideline, so adjust it based on your individual circumstances and retirement goals.
To get to this 15%, first start with your company match, then a Roth IRA, then a 401(k).
The 15% overall investing goal is a general guideline, so adjust it based on your individual circumstances and retirement goals.
To get to this 15%, first start with your company match, then a Roth IRA, then a 401(k).
Step 8) Invest for long-term goals OR pay off medium-interest debt:
Decide whether to invest for long-term goals (like retirement or home down payment) or pay off medium-interest debt.
Medium-interest debt is 6-8%, and is items like student loans, car loans, or personal loans.
Decide whether to invest for long-term goals (like retirement or home down payment) or pay off medium-interest debt.
Medium-interest debt is 6-8%, and is items like student loans, car loans, or personal loans.
Step 9) Pay off low-interest debt OR invest:
Low-interest debt has interest rates lower than the potential rate of return you'd receive from investing
It makes more sense to use money to invest in assets that grow vs. the amount you would save from paying off low-interest debt
Low-interest debt has interest rates lower than the potential rate of return you'd receive from investing
It makes more sense to use money to invest in assets that grow vs. the amount you would save from paying off low-interest debt
Step 10) Do whatever you want:
You can allocate your extra money towards whatever you want.
It could be towards a dream vacation, a new car, a down payment on a house, starting a business, retirement, other investments, or anything your heart desires.
You can allocate your extra money towards whatever you want.
It could be towards a dream vacation, a new car, a down payment on a house, starting a business, retirement, other investments, or anything your heart desires.
Money is a tool, and every dollar you own should be working for you (even while you sleep).
Having a financial plan to follow will help you make the most of your money.
Everyoneβs financial situation is different, and this financial roadmap is just a general guideline.
Having a financial plan to follow will help you make the most of your money.
Everyoneβs financial situation is different, and this financial roadmap is just a general guideline.
Retirement isn't an age, it's a number in an investment account! These threads take time to write, so if you found it helpful:
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