back to articles | June 29, 2022 | Katie Conroy
Categories:   The myAutoloan Difference
4 Impactful Financial Tips to Help You Stay on Track
Are you on track to meet your financial goals? If you’re struggling to save money, pay off debt, or afford the lifestyle you want, it may be worthwhile to revisit your financial habits. Good financial health is a bit of a juggling act.
Are you on track to meet your financial goals? If you’re struggling to save money, pay off debt, or afford the lifestyle you want, it may be worthwhile to revisit your financial habits. Good financial health is a bit of a juggling act. You don’t want to deny yourself experiences and items that enrich your life. But at the same time, you need to put money aside to save for your bigger goals, like buying a home or retiring at 65. Whatever your goals, check out the following tips from myAutoloan.com to get a better handle on your finances.
Don’t Be House Poor
Owning property is a great way to build equity instead of paying someone else’s mortgage with your rent money. However, buying a home is never a good idea if it means being house poor. People who are house poor spend most of their money on their homes, including mortgage payments, property taxes, insurance, maintenance, and utilities. As a result, they have very little left over for other bills, discretionary spending, and savings goals.
Avoid being house poor by purchasing a home below your means. Start by calculating your home affordability—there are plenty of tools online that can help you do this. Once you have a ballpark idea of your affordability, a great real estate agent can help you find homes that check all your boxes without blowing your budget. Be sure to get preapproved for a mortgage so you can move fast when you find the perfect property!
Plan for Your Retirement Today
The sooner you start planning for retirement, the better. The earlier you start investing money, the more your interest will compound, snowballing into some significant savings by the time you retire. If you’re nearing retirement and you’ve been saving for many years now, this is a good time to cut down debt and diversify your investment portfolios to better align with your current risk tolerance.
Live Within Your Means
Living within your means is key to meeting your financial goals. However, many people find it difficult to do this, even as their salaries increase. Lifestyle inflation describes the tendency for expenses to increase along with income.
Funding your savings above all else is a great way to ensure financial security and avoid lifestyle inflation. As soon as your paycheck comes in, divide up your income among your monthly bills, savings, debt-repayment goals, and essential purchases. Flowingcents recommends creating a budget that accounts for every dollar you earn now so you can easily allocate extra income in the future instead of spending it on things you don’t need.
Review Your Spending Regularly
Reassessing your spending habits and your monthly budget regularly is important for living within your means. Start tracking your spending in a budgeting app like Mint or YNAB. Take a look at your spending regularly and take note of areas where you can make improvements. For example, you might find that you’re spending a lot of discretionary money on takeout when that money would be much more useful in your savings. Zero-based budgeting can help you reign in your spending and ensure all of your income is allocated to different spending categories and savings goals.
Budgeting should also be a tool in your company's accounting software. Managing the balance between income and expenses with good accounting practices ensures that your company will have enough working capital on hand to maintain operations. The best accounting solutions are also able to scale with your company’s needs as it grows.
Whether you’re saving for a home, paying off student debt, or just trying to enjoy your life without worrying about money, getting your finances on track will put you in the driver’s seat. Take control of your finances so you can live the life you want. Whatever your income, you have the power to live within your means and achieve your goals!