Being on track with your personal finance goals means more than just having a couple bucks in your savings account. In order to properly tackle and be proactive in your financial and professional future, you have to have complete a few typical milestones, learn some valuable lessons, and keep educating yourself in the current trends in the market.
Take a moment to reflect on where you are in your career and finances. If you need some help setting goals in both of these important aspects of life.
#1) Schedule To Check Your Credit Report At Regular Intervals
This is your first step in creating a budget and being proactive for your financial future. Watch out for any credit errors and mistakes. Build up your credit by making sure that your credit history is accurate. If you have items on your credit report that are accurate, but for some reason you disagree with, you can add comments. This may help with larger purchases like a house since they will scrutinize your credit report during the approval process.
You can check your credit report annually through the three national credit agencies: Equifax, Experian, and TransUnion. Make sure to mix it up a little as well. While most of the information that they gather is fairly similar, there are some minor variances that you should keep track of. These differences change with different consumers and their habits. You can find out more about your credit report at AnnualCreditReport.com. You can also order a free credit report from Annual Credit Report once per year.
#2) Be Free of Debt (For A Moment, At Least)
It is a liberating feeling to be able to be legitimately debt-free. After student loans, consumer debts, and possible medical emergencies, it is less likely that anyone will be debt free for more than a few months.
Being debt-free allows you to see through the perspective of how difficult it is to:
• Work through bad financial decisions
• Keep your priority list in check
• Save and budget for the future
#3) Establish Another Income
The economy has changed. Most households in America have two different sources of income. No matter if you live alone, with a roommate, or with your significant other, you’re going to have to develop and maintain multiple sources of income in order to maintain the lifestyle that you’re accustomed to (when you lived at home with your parents).
Did you know that a third of Americans bring in some sort of freelance income (as part time or full time employment)? Freelance isn’t just limited to the arts either. In addition to work for all of you creatives (paint, sculpt, draw, sketch, write, create, etc.) there is also freelance work for virtual personal assistants, graphic designers, web developers, greeting card designers, etc.
Or…you can take another approach. Try to get your household finances to the point where you can live on one income even if you continue to bring in two incomes. This will give you a windfall of emergency funds, savings, and even funds for investing if that is something you choose to do once your debt is paid off.
#4) Working Emergency Funds Are MANDATORY
Sure, we all know how important emergency funds are but how many of you actually have one? There will be no doubt that you will need one in the future. It’s not just about surprise medical costs either. There will also be car repairs, home repairs, sudden school expenses (for you or your kids), etc. Speaking of which, children can be as expensive as they are cute so make sure you start your emergency fund as soon as you can.
#5) Contributing to Your Retirement Should Have Started Yesterday
You might not have a lot of extra income coming in but no matter what stage of life you are in, you should be making contributions for your retirement. Even the smallest contributions are worth it. The sooner you start saving for your future, the more time you’ll have to build up a decent sized return.
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