I get it.
Money can be anxiety-provoking and intimidating. That’s why I am all about quick money tips that you can take straight to the bank. Why live in anxiety-land any longer than we have to, right?
So in this article, I wanted to share the five most important financial tips you should be practicing right now.
5 Ways to Get Your Financial Life Together
1. Start an emergency fund.
I don’t know if I need to explain why emergency funds are important after the last three years of pandemic madness and layoffs galore, but just in case, here’s the deal: if, god forbid, something happens and you lose your job, you’re going to find that even though you don’t have any income, you still have expenses. And you can’t pay for your groceries with an asset.
By “asset” I mean, something that you own outright that you could sell if you needed to bring in some extra money; like a car, a house, or a boat. Although a house would be worth cold, hard cash if you sold it, it’s not cash now, is it? When you check out at the grocery store and the cashier asks you “credit or debit?” you can’t say “house” right? You’d need to sell that house for cash, which isn’t a feasible way to get cash fast.
So you need some money squirreled away. A doomsday fund, a treasure chest, an “oh, shit” fund, a “break in case of emergency” fund. Whatever you want to call it… you need one.
2. Glow up your credit score.
Your credit score is super important. Think of it like the grade you get on your financial report card. And maybe your report card wasn’t all that important once you got out of school, but in the money world, your financial transcript is a very big deal.
If you’re not acing your credit report, you’ll pay a higher interest rate on your credit card; when you’re buying a home, it will screw with your mortgage rate (and closing costs), and it can be the deciding factor in whether you can get a mortgage at all. Plus, if you need to take out a loan for something important, banks will look at your credit score to approve you… or…. not.
It’s basically supposed to tell people who are looking at it—like a lender—how trustworthy you are, or how likely you are to pay them back. But, you’re in luck! Unlike a transcript with your final end-of-year-grades, there is no “final” credit report. You can always change your credit score. If you put in the work.
3. Sign up for a brokerage account.
A common misconception is that the best way to build wealth is to make lots of money. That’s false. The best way to build wealth is to make your money work for you… and the best way to do that is to invest it. Index Fund and Chill, am I right? Spoiler alert: yes… I am right.
4. Buy an I Bond.
The Series I Bond is the MVP of all bonds right now. Right now, the annualized rate based on inflation is 9.62%! That’s an amazing ROI! And with the potential recession looming, and in a bear market, stellar ROIs are hard to come by. So do your future self a solid, and put an “I” in “I Bonds.”
5. Open a Roth IRA.
Like most people, money has been a source of anxiety in my life. But I am proud to say that is something I’ve gotten a handle on. But one thing that still brings me big stress is thinking about the 37% of Americans that are not saving for retirement. So PLEASE, if you haven’t already, start a Roth IRA— but don’t do it for me, do it for your future retired, cute, wrinkly old self.
You got this.
Take these five financial tips straight to the bank and you’ll be well on your way to financial freedom!
xo,
