We can always use a refresher course when it comes to personal finance. Here are some great steps to help you gain financial independence:
- Identify your spending habits. Are you a spender or a saver? Track your expenses for two weeks using a notepad. It's amazing to see how those tiny purchases add up (cup of coffee, pack of gum, sale clothing). Label each item as a need or a want to figure out how to cut back on your spending wants. To see how much you could save by brewing coffee at home, visit David Bach's Latte Factor site!
- Know your credit history. There's nothing worse than finding out you owe an annual fee on that Ann Taylor credit card you forgot you had! Visit annualcreditreport.com each year to print off your credit report. Review it for accuracy and to get a sense of how much you owe!
- Pay off your credit card debt. Using this free debt reduction calculator to see how much quicker you could pay off your debt by simply adding $20.00 extra each month (also known as the snowball strategy)!
- Put money away for retirement (401k, 403b, Roth IRA). When you start that new job, make sure to take advantage of your employer's 401k or 403b (especially if they will match your funds). By putting money away each month into retirement, you're building a security nest for the future. Use the calculators on dinkytown to see how much you could earn! If your employer doesn't offer a retirement plan, start a Roth IRA on your own. To learn more, visit CNN's personal finance site!
- Develop a rainy day fund (2-3 months expenses). You never know what can happen, so safeguard yourself against any future emergencies!
- Make 1, 5, 10 year goals (Car, student loans, house/condo, marriage/union?)
- Stay motivated! I make it a point to read J.D.'s getrichslowly blog at least once a week to learn new financial tips. It's easy and fun to read!
Good luck!!!
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