Are you casting about for easy opportunities to improve your financial position?
You may not need to look as far as you’ve been. Often, the lowest-hanging fruit is right there in front of us, ready for the taking.
Not convinced? Taking any one of these six simple steps could meaningfully boost your family’s financial position as you look ahead to your kids’ higher education bills, your own retirement, or simply plan your next big vacation.
Completing all six of these steps could dramatically improve your footing. None require special skills or knowledge, although you’ll want to complete step #2 before getting too deep into the weeds.
1. Take a Scalpel to Your Household Budget
Start by taking a scalpel — not an ax, at least not yet — to your household budget.
You can almost certainly rattle off a handful of household expenses that you probably don’t need to be paying, or that you can reduce with relatively little effort. These are just 10 common examples, many of which probably apply to your own financial situation. If you could save a couple hundred bucks per month without really changing your lifestyle, why wouldn’t you?
2. Work With a Trusted Wealth Manager
Next, find a wealth manager you can actually trust. Award-winning wealth management professional Daniella Rand recommends seeking out a financial advisor who makes them feel comfortable and confident in their financial decision-making — while setting realistic expectations about their ability to meet financial planning goals.
3. Open Tax-Advantaged Retirement Accounts and Make Regular Contributions
If you don’t yet have an IRA to your name, open one as soon as you can and begin making regular contributions. Tax-advantaged traditional and Roth IRAs are powerful aids for retirement savers, although they’re not alone sufficient for most workers.
4. Look Into Other Tax-Advantaged Account Options
Your IRA isn’t the only tax-advantaged account you should have. Depending on your employment status, family size, and lifestyle, you may want to open others.
For starters, see whether your employer offers a 401(k) or other qualified plan. If that’s the case, enroll. Consider a state-sponsored 529 plan to fund your kids’ education expenses, and a health savings account to cover medical expenses (or supplement your retirement fund, should you remain healthy).
5. Take Advantage of Your Employer Match, If One Is Offered
One more point about qualified plans: Many employers offer matching contributions up to a set dollar threshold. If you’re fortunate enough to work for one who does, take advantage of every penny.
6. Know Where You Want to Be in 5 and 10 Years, And Beyond
You’ve surely encountered this question in an interview setting, but have you given it any real thought outside the context of your career? If you’re going to get serious about financial planning, you need to have a precise idea of where you want to be in the near and far future, and what it’ll take to get there.
Financial Security Is Within Your Grasp
Still daunted by the prospect of securing your financial future? You shouldn’t be. If this list makes one thing clear, it’s that financial security is well within your grasp. Here’s to a more prosperous future, whatever may come.