A Plan for Improving Your Finances
Spring is more than just a great time to clean out your closet. It is also a great time to clean up your spending and improve your finances. Depending on how much clutter you find when looking into your financial closet, the thought of spring cleaning may seem daunting. Consider implementing our SPRING cleaning plan to help make things more manageable.
Schedule a meeting with your Stifel Financial Advisor.
Your Stifel Financial Advisor will help you identify, prioritize, and pursue your short-term and long-term spending goals. By working with your Stifel Financial Advisor, you will also gain access to resources that can help you better manage your financial well-being.
Plan for unpredictable expenses.
Certain expenses, such as utility bills and mortgage payments, occur in regular intervals. Others, such as vehicle repairs and medical bills, are much less predictable. These unpredictable expenses can cause significant financial strain if they are not incorporated into your budget. By fully funding a separate account to be used exclusively for unpredictable expenses, you will be prepared to handle these expenses when they arise.
Review your budget.
Your budget is the foundation of your financial well-being. It facilitates organized and efficient spending, while holding you accountable for your spending decisions. You should periodically review your budget and make appropriate adjustments. You should also compare your current budget to past budgets in order to identify spending patterns.
Invest in your future.
Before you pay others, you should remember to pay yourself. By saving now and investing for your future, you will enhance your ability to retire on your own terms. Consider automating contributions from each paycheck to a retirement account to help you meet your savings goals. Furthermore, if you receive a raise or bonus, consider increasing your savings before you increase your spending.
Notify yourself when your spending exceeds your budget.
Swiping a credit card can be a thoughtless process. Set up alerts for each charge that exceeds a certain amount. This will promote spending awareness and responsible credit card use.
Give separate expenses separate accounts.
Allocate the money needed for various expenses among multiple accounts. This will help you organize your spending while keeping your budget on track. Establish one account for known expenses, one account for unpredictable expenses, and one account for discretionary spending. Challenge yourself by funding your discretionary account with the maximum amount you hope to spend on discretionary items. Then, resist the urge to add to the account as it becomes depleted.
Wealth Planning Tip
Remember to include some fun in your budget. A budget without fun is like a diet without a cheat day – difficult to maintain.