You’re never too old or too young to get your personal finances in order. If you are in your 20s, you might think that you have plenty of time ahead of you to save and invest, but this is a prime time to put away small amounts of money that will grow exponentially over the decades. If you are in your 50s and have not saved or have lost your savings, you might think that it is too late and you have messed up your finances permanently, but there is still a lot you can do and plenty of ways to turn around what’s happening with your money. The tips below can help you revamp your personal finances no matter how old you are.
Make a Budget
A budget can significantly reduce your spending, and apps have made creating a budget easy. They can track your spending so that you have a realistic idea of where your money is going and help you figure out how to better allocate it. You may be surprised to find that there are major areas where you can cut back and put the money that you save toward debt and investments.
Get Out of Debt
One of the best personal finance tips you could follow is to get out of debt and stay out of debt. In fact, in many cases, getting out of debt is more important than putting money into savings because you may be paying more in interest than you could get from a savings or even an investment account. One of the exceptions to this rule is a mortgage, but when it comes to all other debt, you should do your best to get rid of it.
One type of debt some people may carry for decades is student loans. Ideally, you would pay off your student loan debt within ten years or so of graduating from college, but some people are still paying well into middle age. Whether you are 25 or 45, if you have more than one student loan, you might want to consider a student loan consolidation. With a consolidation, you now have only one payment due instead of multiple minimum payments and due dates. This can save you money each month and make it easier to pay off the loan. You may want to see if you can simplify or reduce the interest on other debts as well, such as by rolling credit card balances onto a lower-interest card.
If you don’t have any emergency savings, this should be your first priority. Even if you can only save a few dollars each week, it’s better than not putting away anything at all. Ultimately, your aim should be to have at least three months of living expenses. You should also be putting money in a retirement account. If you are in your 20s, you should be putting away the maximum. If you are in your 40s or 50s and have little to nothing saved for retirement, you might want to meet with a financial advisor to discuss how best to maximize your savings. Finally, consider other investing. Apps have opened up the investment world to anyone with a smartphone and an internet connection, and you can begin with as little as $100.