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Top 5 Financial Tips You Need to Know in 2020

Top 5 Financial Tips You Need to Know in 2020

Meeting financial goals isn’t easy because sometimes things come up that make it hard to save or we simply don’t have the discipline to do it. Regardless of which boat you’re in, you can achieve your financial goals with the right guidance and the right tips and tools. From spending less than you earn by creating a budget (and sticking to it) to considering a bank card for emergencies, there are tons of ways to help you get ahead financially. Here are five tips you need to know in 2020 to help you reach your financial goals.

Spend Less Than You Earn

One way to spend less than you earn is to create a budget and stick to it. Set up a system that helps you track how much you spend compared to how much you earn every month. Once you know how much you can reasonably save, set savings goals that you can reasonably hit each month. For example, if you want to buy a house or save for retirement, start saving what you can so that eventually you will be able to reach that goal. Consider using a budgeting app like Mint, YNAB, PocketGuard, YouNeedABudget, or Wally.

Save as Much as You Can

If possible, save money by automating your saving, or if you’re currently working, consider diverting a percentage of your paycheck to a savings account before you even get a chance to spend it. Some financial experts recommend saving between 10 and 15 percent of your income from each paycheck. Doing this can ensure you have the money you need to reach your financial and savings goals. There are a few apps that can help you save, like Joy, Chime, Tip Yourself, Qapital, Digit and Empower Finance.

Consider a Bank Card

A bank card can offer certain perks and rewards you might not get when spending cash, such as cashback rewards and points on dining out, gas, and groceries. Some bank cards can also allow you to build credit so that you can reach your financial goals, such as buying a house or financing a new car. For example, if you bank with USAA, you can get a card with no annual fee and no penalty APR, not to mention variable APR rates ranging from 9.90 percent to 25.90 percent. The best part is that there are no limits or category restrictions on the amount you can earn, and you can redeem your cash rewards anytime using your computer or mobile device.

Pay Off Your Student Loans

Refinancing your student loans consolidates all of your student loans into a single student loan, typically with a lower interest rate and only one monthly payment. There are a few other ways to pay off your student loans, including using an income-driven repayment plan, applying for student loan forgiveness, and making lump-sum payments to get your total balance down so you don’t rack up so much interest. Create a plan to pay down your student loan debt in a reasonable amount of time and stick to it. Whenever you get large sums of money, like a bonus at work or your income tax refund, try to pay as much as you can of your student loan balance.

Create an Emergency Fund

The importance of an emergency fund can’t be emphasized enough because it can help you get through life’s unexpected circumstances practically unscathed, and it can help you avoid tapping into your long-term savings for things like a broken water heater or replacing an expensive part on your car. It’s basically an insurance policy for life’s unavoidable disasters.

After you’ve tracked your expenses and created a budget, set aside some of your money and put it in an account that’s somewhat easily accessible in case of an emergency. Use any windfalls you receive to fund your emergency savings or consider making extra money to build it up, especially after you draw money from the account.

Creating Better Financial Habits

Now that you know what to do to reach your financial goals, you can start making the necessary changes in your life to get you closer to them. Whether you decide to start with budgeting, saving 10 percent of your income, creating an emergency fund, or getting a bank card, improving your financial habits means you’re on your way to a better financial future in 2020.

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by Harvey Carr // Harvey Carr is a contributor to Businessing Magazine.

Opinions expressed by contributors are their own.