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Take Control of Your Finances in 2016!
It is a New Year and that means a fresh start and a great time to get your money under control! Follow these tips to take charge of your finances in 2016!
1.) Write it all down! Figure out where your money is going. I can’t tell you how many people get to the end of the week or the end of the month and don’t know why they don’t have any money left. Get out all of your bills and expenses and learn how you spend your money!
2.) Get that emergency fund started. Now is the time to start putting away money in case something like a job loss or illness strikes. I always recommend having at least 8 months’ worth of expenses saved in case of emergency.
3.) Get a free copy of your credit report. Know where u stand with your credit going into the new year and if there are issues to be handled, get started. You are entitled to a free copy of your credit report every year.
4.) Trim the fat. This tip refers back to tip #1, when you grab all of your household bills to see where your money is going, you can also see where you can cut expenses. You can reduce the cable bill, your cell phone bill, even electric and gas bills.
5.) Get a side hustle! Do it now! We all have talents we can turn into income. Editing manuscripts, updating resumes, telemarketing from home. Find a way to get another stream of income in 2016!
6.) Keep a money journal. Write down what you spend your money on and try to keep receipts. You can do it by the week or by the month. This will let you know in black and white where your money is going; 3pm coffee, happy hour, too many “quick” shopping trips, then you will be able to see where you need to make changes.
One Response
Those are all great ideas, but I doubt they are really something that Millennials will actively do. You need a real go-getter to follow your steps as you have them outlined, and chances are people like that are already in control of their money. Instead, consider banks and free services that will do all of this for you.
Simple is a great bank for Millennials as it encourages automatic savings, clearly delineates your spending, and provides a “Safe-To-Spend” number which takes into account your scheduled savings transfers, upcoming bill payments, etc. You won’t earn interest or have a joint account, but for someone on their own, Simple is one of the best banks to help turn your financial life around.
Or, if you want to keep your own bank, there’s lots of services that will aggregate your spending and give you detailed reports of where your money is going. Mint, Personal Capital, Sig Fig (for investing) will all download your bank transactions and categorize them for you. I know personally that the Mint app will also let you log cash transactions, so even if you didn’t use a debit/credit card, you can still keep track of your spending. All of these services will set budgets for you and alert you when you’re nearing your limit.
For emergency funds, get a savings account with a reputable online bank. Why have your funds sitting in a big bank earning 0.01% interest? If you’re not using the all-in-one solution at Simple, then open up savings accounts yourself. Some of the large online banks are giving back around 1.0% or more on savings accounts right now. Check out Ally, Synchrony Bank, Barclays US, GE Capital Bank, MySavingsDirect (backed by the massive Emigrant Bank), and Discover Bank to name a few. They all have no fees very low (if any) minimums, and will pay you back in much, much, much more interest than almost all brick and mortar banks.
Anyway, my two cents. I’m not a banker or affiliated with any of the above companies, just a Millennial who enjoys taking control over his finances.