Many people believe that “money makes the world go ‘round”, but do most people know how to manage it properly?
After clocking in long hours at work, paying for all your necessities, and perhaps even splurging a bit on some items on your wish list, do you know if you’re in good standing financially?
Managing your money is likely one of the most important skills that anyone can have.
Whether you’re a teen stepping into adulthood, or someone simply wanting to develop better spending and saving habits, technology today makes staying on top of your finances easier than ever.
1. Check Your Credit Report
This magic number called your credit score is practically your golden ticket to being able to make any major purchases.
For example, your car, your home, bank accounts, and sometimes even prospective jobs may use this figure to make a decision about you and the potential level of risk involved in doing business with you.
Because of this, it’s important to understand what affects your score and how to closely monitor it.
In addition, watching your score can help you identify any red flags, for example, suspicious activity on any of your accounts that might be signs of identity theft or other criminal activity.
Some methods of looking into your credit report can actually lower your score, so it’s important to take advantage of the tools at your disposal.
2. Keep Track of Your Spending
Even though spending a dollar here and there might not seem like much when you’re doing it, it can add up over time, especially when you don’t track your spending.
The truth is that sometimes people simply forget what they have purchased or cannot mentally keep track of their spending.
By checking your accounts regularly online and using apps that can help you log your purchases and deposits in real time, and even get instant alerts, it can be easier to stay within your budget to meet savings goals.
Most importantly, tracking your spending can help you avoid or eliminate harmful debt.
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3. Start a Retirement Account Early
When you’re just starting your career and beginning to hit major milestones, it may feel like retirement is well into the distant future.
However, because of employer-matching retirement programs and compound interest, early investments have more time to grow and yield an even higher percentage of returns.
If you are not familiar with retirement programs or high-interest savings you should start doing research and asking the following questions:
What is compound interest?
What is a 401k?
What is a Roth IRA?
If you picture yourself enjoying your golden years relaxing versus being forced to work indefinitely to make ends meet, starting a retirement account can be one of the most practical things you can do for yourself.
Luckily, with online monitoring tools, you may even be able to manage your account and check it periodically to ensure that your savings are on track.
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4. Consider Investment Accounts
The stock market may seem like a scary thing to a novice investor, but it doesn’t have to be.
By understanding the various types of accounts out there and starting early, your account has plenty of time to mature and to adapt to the natural rises and falls in the economy. And most importantly, allow you to save for bigger ticket items that may not be easy to save for with traditional savings accounts.
While retirement accounts are one of the more popular investment accounts, there are many others out there that can be dedicated to pricier buys such as real estate and education.
With a wealth of knowledge available at your fingertips, you can follow blogs and forums about investments, take an online investment course, and monitor your portfolio online.
There are even apps available that allow you to make investments using your personal device.
5. Use Credit Cards With Care
While compound interest can be a good thing when trying to earn money, it can be detrimental to those in debt.
While having that purchasing power available to you can seem very enticing, using a credit card irresponsibly can result in seemingly endlessly growing debt that some are unable to pay off.
If the simple mathematical concept of using less money than is earned is a difficult one to monitor, credit cards can be harmful.
However, when used responsibly, credit cards can be very useful. By being approved for higher limits, yet using a small percentage of it, you can improve your credit score.
Comparing the benefits of multiple cards online, perhaps even reading real customer reviews, can help you decide about ones might be the most beneficial for you.
Credit cards also often come with rewards programs that can help you earn extra cash, travel vouchers, gift certificates, buyer protection, and valuable benefits that can be ultimately money-saving.
With all the tools available online or from your personal device, you can be set up for success when it comes to spending money responsibly, saving, and making wise investments.
Since technology makes it increasingly easier to use tracking and money management tools in addition to accessing expert advice on just about any financial matter, you can easily be on the right path to a bright financial future.
Stock Photo from garagestock @ Shutterstock