5 Things You Should Have Been Doing To Drastically Aline Your Finances From Day One
When it comes to finance I have always been fearful because I know I was not making 6 figures so I asked myself “Why keep track anyways ?” and that keep me in the mentality to just live paycheck to paycheck. You see the reality is facing your fears with money is something you will have to do willingly or it will come up to haunt you when you least expect it.
The last 2 years have been very difficult. Not only have we had to deal with travel restrictions, lockdown orders, and fears of getting sick — many of us have also been struggling financially.
Budget ( Yes I know You just did not want to see this one but )
The best way to stay on top of your finances is to make a budget you can stick to. While this seem very obvious many will avoid even talking about money because it can be a stressful topic.
Ignoring the topic can cause you to go further into debt and just lead you into a bad path that you do not even know about and will not even consider checking until you are forced to or in a position where you need to make a big purchase for example a home or car.
Create A Budget You Can Stick To ( it might be hard to be realistic here. but. it is okay the trust is you are the only one seeing it and you can make changes where necessary so it’s okay not to overwhelm your self).
Creating and maintaining a budget is the foundation of good financial management. From your very first paycheck, you should have been allocating your income towards different expense transportation, food, payments, savings and more.
By keeping track of your income and expenses, you gain a clear understanding of where your money is going. This knowledge empowers you to make informed decisions, identify areas where you can cut back, and prioritize your financial goals effectively.
Start an Emergency Fund
Pregnancy and the pandemic taught me this the hard way. Many events can take place unexpected and the sooner you realize that the better. We have no control over the future life is unpredictable, and unexpected expenses can throw your finances off balance.
This is why building an emergency fund should have been a priority from the beginning.
( I had no idea what and how to start an emergency fund a few years ago so if you are sailing in that boat )
Here Is What You Need
Open an account preferably high yield savings account according to Annuity A high-yield savings accounts allow you to earn significantly more interest on your money. High-yield savings accounts are especially favorable in times of low interest rates and they provide easy liquidity, but you may encounter drawbacks such as a limited number of monthly transactions and a less timely fund transfer process. This makes it perfect for long term saving such as emergency funds : the long it is there , the more you save the more interest you accumulate from your bank.
This was a little motivation for me. One thing that helped me to start accumulating some funds when I first started was setting up auto pay that way every-time time I have to deposit money in my emergency fund I do not have the time to think twice and find some thing else to do with the money.
You can start small !
While everyones emergency fund goal looks different it is always a good idea to start small, I started with $30 and just by setting up auto pay every time I check my account I feel happy confident in my emergency fund.
Ideally, aim to save three to six months’ worth of living expenses in a separate account.
This fund serves as a safety net during unforeseen circumstances such as job loss, medical emergencies, or major home repairs. Having an emergency fund in place provides a peace of mind and helps you avoid going into debt when faced with unexpected financial challenges.
Tackle Your Debt
During the pandemic I accumulated debt, such as credit card balances and more, I neglated it because i though some how the government would create a special program for people like me to help. pay all this off. I neglated the tackling my debt stegically which hurt me in the long run. So I am here to tell you this to the ret of the world you are just another civilian no one importnt. So put you and your finaces first. It’s important to address it proactively.
The interest on these debts can eat into your income and delay your progress towards financial freedom. I cried when i saw one credit card accumilated almost a $1000 in interest.
From day one, you should have focused on paying off high-interest debts first while making minimum payments on others. By adopting a debt repayment strategy, such as the snowball or avalanche method, you can accelerate your progress and free up more money for saving and investing.
Invest in Your Future
The earlier you start investing, the more time your money has to grow. Investing is not just for the wealthy; it’s a crucial step towards building wealth and securing your financial future. From day one, you should have been allocating a portion of your income towards investments like stocks, bonds, mutual funds, or real estate.
Taking advantage of retirement accounts, such as a 401(k) or IRA, can provide tax benefits and help you accumulate wealth over time. Remember, compound interest is your friend, so the sooner you start investing, the greater your potential returns.
Educate Yourself On Money
Financial literacy is a powerful tool that can transform your relationship with money. From the beginning, you should have been actively seeking knowledge about personal finance. Read books, follow reputable financial websites and blogs, listen to podcasts, and attend seminars to expand your understanding of money management, budgeting, investing, and building wealth.
Basically educate your self on the money terms some popular ones. are :
Credit Score, ROI (Return On Investment ) , Annual Percentage Yield (APY), Inflation and Net Worth
By continuously educating yourself, you can make informed decisions, adapt to changing financial landscapes, and improve your financial well-being over time.
Key Take Away
Even-though these are steps we should have been taking from day one many even my self fall in the trap of ignoring my finances which lead to debt or little to no finical stability. Gone were the days you had to stick to (living pay check to paying check) there are many things / action you can take to take back full control of finances from day one. It is a wise decision that can have a significant impact on your financial future.
I am here as a guide to help you find your way to wealth. while that is defined diffrent for everyone my hope is that this blog can become a resource for you to find what you are looking for MINIMALLY. It’s never too late to start taking control of your finances, the earlier you begin, the more time you have to build wealth and achieve financial independence.
By establishing a budget, building an emergency fund, tackling debt strategically, investing for the future, and continuously educating yourself, you can set yourself up for long-term financial success.
Remember, financial alignment is a journey, and each step you take brings you closer to achieving your goals.
Comment and let me know if you have tried any of these steps and how it has been working for you. Share this with a friend as well.
