Life-changing Money Moves You Can Make Today

There is a LOT of personal finance advice out there - solicited or not. Every book, blog, and podcast is ready to bombard you with information while you’re commuting to work or casually browsing the internet, but do you ever actually put these things into practice?

If you’ve got an hour or two to spare, put a money date on your schedule. Close out of your other tabs. Stop gathering info and agonizing over the many, many things you could do.

It’s time to make a move or two that could quite literally change the trajectory of your life, and all you need is an internet connection and an hour or two.

These aren’t in order of importance, but as you descend the list, the tasks get shorter. Even if you only accomplish one thing from this list, it is still a huge win for future-you. Each of these smart moves will set you ahead, and get you on a path towards financial independence. Without further ado, here are five simple money tasks that you’ll be glad you did in a few years:

1. Make a plan for your monthly spending.

Whether you have a budget or not, the key to reaching all of your financial goals lies in choosing where your money ends up. In general, it’s ideal to spend 50% or less on your needs (rent, groceries, car insurance). The remainder should be split between your variable expenses and your financial goals - the more you can put towards saving and investing, the better.

To start, take a look at your biggest spending categories - often, these will end up being your rent/mortgage, car payments, and groceries. Pick one and resolve to spend 10% less, or cut something that you find less necessary completely. Canceling a few subscriptions and calling around to car insurance companies to find a better rate could save you hundreds over a year!

2. Allocate more funds to retirement.

There are a couple of ways to do this, and all of them are easy to accomplish in an afternoon. And, of all the items on the list, this one is the most likely to make you rich in the long run if you start early enough.

If you have a 401k or 403b through your employer, it’s as simple as requesting a form from your accounting team and setting an amount (or percentage) to withdraw each month. The rule of thumb is generally that 15% of pre-tax salary is sufficient to retire at 60 and live comfortably. However, if your goals are more aggressive or you are starting after age 25, you may need to choose a higher number. Don't forget to look up any contribution maximums in your state! 

If you’re not sure where you stand, try an online calculator. Just add your age, income, current deductions, and retirement savings to see how close you are to beating your goals. If you’re falling a bit short, try increasing your contributions by a percentage point each quarter, or each time you get a raise.

If you’re self-employed - or just looking to diversify - you can open a Roth IRA account. Once you open an account and fund it, make sure that you choose your investments. 

3. Open a high-yield savings account for your emergency fund

It’s no secret that banks are making money off of your balance, but did you know that you can get a piece of that through interest?

A HYSA is just as easy to open and fund as a typical savings account - just find one you like and apply for an account with your legal name and social security number. These accounts offer up to 5% annual returns, depending on the bank and the market rate at any given time.

By putting your emergency fund here, you keep it safe while also earning risk-free interest on the balance. It’s still accessible if you need it, but the money has a place outside of your checking account where you’re less likely to draw from it unnecessarily. 

4. Automate your savings

Speaking of savings accounts, why not automate your monthly savings first? 

In my early twenties, I often struggled with overspending my budget - and, the category that always took the damage was savings. Once I set an automatic transfer, I no longer had the option of spending that money without manually moving money out of savings; it was much easier to say no when the alternative felt so much like taking steps backward.

That one simple change meant I no longer had to actively choose the right thing every month; past-me had already set up the system knowing what was best. For present-me, that meant I could focus my attention on other things knowing that future-me was taken care of. Win-win, right?

If you have a particular short-term goal, just take that amount and divide it by the number of months you have left to save. For example, If I wanted to save up a $4,000 down payment on a car by the end of one year, I’d set up a monthly transfer for $334. Twelve months later, I’d have my down payment without giving it another thought.

5. Check your credit score

Whether you’re looking at a big purchase now or in the future, your credit score is eventually going to matter - whether you track it or not. 

Don’t be afraid to look at your report! It may be disappointing to find a number lower than you expect, but just know that it’s totally normal to have to work on this. If your score is low and you don’t already have a bank and a credit card, go ahead and take those first steps.

Note: Many banks and credit card companies will have options for you to check your score safely and easily; be very careful of scams if you turn to Google to search for a service! 

In summary…

Managing your finances can be overwhelming, but if you do these five things, you’re well on your way to smashing your goals. Not bad for an afternoon, right?

If you are itching for a few more items to add to your to-do list this week, try this guide to increasing your income. Or, check out one of my favorite personal finance books for some cozy weekend reading. 

Until next time,

x Rin