If you’ve been neglecting your savings and investment goals, the best time to turn things around is as soon as possible. But it can be hard to know where to start, especially if you don’t have much (or any) experience managing money — which may of course be a big part of why you’ve been putting this task off.
Empower takes the all-inclusive approach, giving you a holistic look at your financial picture. Their free financial tools can help you make a plan and determine your next steps, of course — but that’s just the beginning. There are plenty of other things you can do to take control of your financial future. Discover our top tips and tools below.
Have a Plan
Financial goals vary widely from person to person, because they’re determined by things like your current financial state, individual priorities and stage of life. A recent college graduate with student debt might be focused on paying off loans and setting up retirement accounts, for example, while someone gearing up to retire is likely adjusting their investment portfolio and assessing retirement expenses. That’s why it’s important to have an actionable plan for yourself and your needs.
Empower’s free tools can help you get clarity on your money and take control of your finances so you can keep your financial goals front and center. Then, once you have a better understanding of your finances — and your options — you’ll be able to fine-tune your plan.
Track Your Spending and Build a (Realistic) Budget
Before you can begin saving or working toward other financial goals, you have to know where your money is going. Start by making a list of everything you spend in a single month, then assess where you might be able to cut. Maybe there are streaming services you aren’t using anymore, or maybe you’re going out to eat more than you realize. Only when you understand your expenses can you set up a budget that will actually work for you.
When you’re ready to build it, you’ll first need to map out your income and fixed expenses (like rent or mortgage payment, car insurance and cell-phone bill), then estimate your variable expenses (like groceries, utilities and entertainment). Next, consider where you might be able to reduce spending and adjust your budget accordingly. Remember that you can adjust your budget to different levels throughout the year, depending on your needs — like if you’re going on a big trip, or need to factor in gifts during the holiday season.
Put Recurring Financial Reviews in Your Calendar
You should always have a pulse on the state of your finances. Scheduling regular “appointments” in your calendar to check on it will help you stay consistent. You can determine what cadence works best for you (and your partner or family), but a mix of weekly and monthly check-ins is a solid place to start.
During weekly reviews, quickly assess your spending against your budget, your checking and savings account balances, and upcoming bill due dates. For the monthly ones, you’ll want to spend a little more time digging into all of your assets, including retirement and credit-card accounts. You might also want to check your credit score, examine recurring subscriptions and memberships, set new short-term goals and adjust your budget for the next month.
Prepare for the Unexpected
If you don’t currently have an emergency fund, work on setting aside enough money to cover three to six months of expenses. You can factor this into your budget, adding a little bit to the fund every month. This money can help keep major unexpected expenses and situations (think medical issues, home repairs or even losing a job) from significantly impacting your financial aspirations. The “What If” worksheet from Empower is also a powerful resource for future-proofing your finances.
Shop and Spend Smarter
Avoid buying anything at full price — easy to say, yes, but also easier to accomplish than you might think. You can plan your weekly menu around what’s on sale at the grocery, for instance, and browse the discounted racks when you’re looking to upgrade your wardrobe. There are also tons of coupon and cashback tools available for free online. Also, be sure to look into any current credit-card offers and benefits you might be able to take advantage of before making any purchase.
Finally, if you’re one to make impulsive purchases, always take a list to the store and stick with it, whether you’re picking up groceries or putting together a new outfit. Some people find joy in discovering new snacks or picking up a fun accessory from time to time, of course — so if that sounds like you, try putting a TBD bonus item (or two) on your list as well. This way, you’ll now have the freedom to veer slightly from the list without overdoing it. As with most things in life, moderation is key.
Disclosure: Empower refers to the products and services offered by Empower Annuity Insurance Company of America and its subsidiaries. This material is for informational purposes only and is not intended to provide investment, legal, or tax recommendations or advice.