This November, to take charge of your finances!
Here are the 7 steps in our 30-day challenge, plus some bonus steps:
1. Order a free copy of your credit report
2. Look at your spending for the last week (or month). Take stock of where your money is going, including coffee, Netflix, Amazon, restaurants, gas, etc.
3. Once you see what you’re spending on, find areas where you can start to cut spending. Is there a subscription you can cancel? A less expensive product you can substitute for a more expensive one?
4. Write down a list of your goals: what do you want to save up for? It’s a good idea to include not only near-term purchases, whether luxuries or necessities, but also longer-term goals. Don’t self-censor here. Write down what you want and estimate how much it will cost.
5. Make a savings plan. How much can you start setting aside to save for what you wrote down in the previous step?
6. Brainstorm side hustles. Is there a skill you have that you can start using to earn some money on the side? You don’t have to cut spending to save more. You can save more by finding new sources of income, too.
7. For one week, cut out some of your discretionary expenses – whatever they might be. At the end of the week, see how much you’ve saved. Start to think about how that sum can accumulate as you get into the habit of watching what you spend.
Bonus: If you don’t already have one, set up a tax-free savings account. These are excellent accounts for saving money. You can use the money you put in that account to buy stocks, bonds, mutual funds, or other investments. The profits on your investments when you sell this is tax-free – hence the name of the account. (Usually, you pay tax on 50% of the gains you make from investments. Not in these accounts.)
Bonus: Go see a financial advisor for a free consultation. Talk with an advisor to see what they can do for you, whether you are a student, a new parent, a homeowner, a businessperson, or someone nearing retirement. Use the meeting as an opportunity to ask all your questions about saving, investing and planning for your future and for what is important to you.
Bonus: Start an emergency fund. The money you save in this fund is not just for a “rainy day” but for all kinds of unexpected expenses, including car maintenance and other bills that suddenly put a financial strain on you. It is a great idea to start now to prepare for those expenses, before they arise.
Track your progress. Post your insights and results to social media using the hashtags #FAFA and #FinancialLiteracy.
When you cross the finish line on November 30, write to us and tell us about your experience. We’d love to hear your stories. We’ll be inviting some of you to be guests on our Financial Advice for All Podcast to talk about what you discovered!