By Matthew Gaude & Shawn McGuire
Did you know that 4 in 10 Americans admit that they prefer not to think about money? (1) This isn’t all too surprising since finances can seem complicated and overwhelming, and many people suffer from decision fatigue, unsure of how and where to start. If that’s you, here are 5 actionable steps to get your financial house in order.
1. Get Organized
Despite how digital our lives are becoming, there are still times we need physical documents. Find a system that works for you, whether it’s a binder, a locked filing cabinet, or an in-home, fireproof safe.
To start, separate your financial papers into three categories: bills, documents or statements to save, and old items you can toss. Gather everything together neatly and store it in one place that is easy for you to access.
Use a Password Manager Tool
Do you have a system for keeping track of your countless usernames and passwords? You’ll save yourself some headaches if you can find a method to keep all your information in one place. There are plenty of online password managers to choose from, but however you decide to organize your login details, be sure to regularly update your passwords to protect yourself from hackers.
If you want to minimize the amount of paper that piles up on your counters, save a tree and get rid of clutter by enrolling in paperless document delivery for all your bills and financial services. Since you’re planning to create a password management strategy, the only thing you’ll need to do to access account details is find your login information and be on your way.
Develop a master directory that lays out all your financial information to help you manage your affairs and serve as a guide to your family members if they ever need to assist with your finances. Be sure to include account numbers and logins and keep this document password-protected or under lock and key.
2. Commit To A Realistic Budget
Part of being financially organized includes being aware. If you know how much money is going in and out and stick to a budget, you won’t find yourself scrambling to pay bills or wondering where that recent paycheck went.
A budget helps you establish parameters for operating your household, understand if your goals are achievable in your desired time frame, and may help reduce stress in the event of an unexpected incident, such as the loss of a job or an injury.
3. Automate Everything
Automating your bills and savings not only streamlines and organizes your life but also has long-term benefits for your financial world. Paying your bills automatically tends to improve your credit score, makes budgeting simpler, and can also make income tax preparation easier.
Additionally, by automating your savings, you give yourself a chance to save before you can even touch the money.
4. Tackle Your Debt
If you are excited about conquering your goals, one of the first steps you need to take is to eliminate debt. When you are paying 10-30% interest on any number of credit cards or loans, you are cutting down on the money you have available to put toward your goals.
Become relentless about reducing your debt and interest costs and consolidate accounts where you can. If you have a loan with a significantly higher interest rate than the others, you may want to work on paying off that one first. Or, if you’re feeling overwhelmed by debt, try paying off the loan with the smallest balance first, no matter the interest rate, in order to gain some momentum.
An emergency fund can help you avoid accumulating more debt. By creating a liquid, easily accessible savings account, you won’t have to rely on debt to cover those inevitable life expenses, such as home repairs or medical bills. Create this cash cushion by putting aside money from each paycheck until you have enough to cover approximately three to six months’ worth of living expenses. You will never regret having an emergency fund at the ready.
5. Create Or Update Your Will
It’s estimated that nearly 70% of Americans die without a will. (2) People may avoid completing their wills because they don’t like to acknowledge that they will die, or they may think it’s a complicated and expensive process. But the truth is that the value for your loved ones and heirs will far exceed your cost and effort. In the simplest of terms, a will allows you to ensure that you can leave a legacy to your desired beneficiaries, from physical household items to assets. Without a will, the state will determine what will happen to your assets, and the process for your survivors and heirs may be much more complicated and time-consuming than it should be.
If you don’t already have a will, it’s time to work with an experienced professional to create one. If you haven’t reviewed yours in five or more years, it’s time to review and make any necessary updates.
Ready To Get Started?
Working with a financial advisor involves more than just opening an IRA and setting up monthly contributions. Advisors add value to your money and your life by taking care of the details and giving you confidence in your financial future. If you want to benefit from the knowledge and experience of a financial professional as you get your financial house in order, schedule a free introductory 15 minute phone call online today!
Matthew Gaude is an *investment advisor representative and the co-founder of Live Oak Wealth Management, a financial services firm in Roswell, Georgia. He serves the planning and investment needs of corporate employees, those approaching or in retirement, and 401(k) plan sponsors. Working first as a commodity broker and then as a Business Development Manager for a national broker-dealer in previous jobs, he has the insights and experience to help clients understand the complexities of the market and implement strategies to minimize risk. To learn more about Matthew, connect with him on LinkedIn or visit www.liveoakwm.com.
Shawn McGuire is a financial advisor and the co-founder of Live Oak Wealth Management, a financial services firm in Roswell, Georgia. He serves the planning and investment needs of corporate employees, those approaching or in retirement, and 401(k) plan sponsors. He has worked in financial services since 2002 in positions ranging from financial advisor to stock broker and portfolio manager. As a CERTIFIED FINANCIAL PLANNER™ professional, he is trained to help clients with virtually all their financial needs. To learn more about Shawn, connect with him on LinkedIn or visit www.liveoakwm.com.
Securities offered through American Portfolios Financial Services, Inc., member FINRA/SIPC. Investment advisory services offered through *American Portfolio Advisors, Inc., a SEC Registered Investment Advisor. Live Oak Wealth Management, LLC is independently owned and not affiliated with APFS or APA.
Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc. (APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk, and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.