Having a savings account is absolutely vital for your financial health. You must protect yourself and your family from financial emergencies. If your family suffers a pay cut or layoff, having money in savings will be invaluable. The same is true if you have an unexpected need for vehicle repairs, home repairs, or medical bills in the future.

What You Can Do

Start a savings fund today. Start as small as you need to, and just let your emergency fund grow over time. It may seem tedious and overwhelming to add to your savings if you’re living paycheck to paycheck, but it is possible. In fact, you can put $1000 away this year without stressing yourself out in the process!

Try these tips for painlessly growing your emergency savings fund:

1. 1. Pay yourself first. Building cash reserves is vitally important, so pay yourself first. Set a specific amount that you can save every pay period and pay that money to your savings before you do anything else. This will ensure that you are putting money away, even if that amount is small at first.
      • • Check to see if your bank has an automatic transfer option. Set it up to transfer your set amount of money out of your checking account and into savings automatically for you each pay period. Out of sight, out of mind. Soon you won’t miss it at all!
        • Even $5 per week will add up to $260 this year if you start the week of January 1st.
          
          
   2. Keep funds out of reach. Although it’s important to keep money accessible so you can reach it when you need to, you should keep your funds out of reach as best as you can to make it harder to spend the money that you wish to save.
      • • For example, use a bank that isn’t in your immediate area. By putting more work into the process of getting your money, you keep it out of easy reach so you don’t spend it poorly.
          
          
   3. Save pocket change. Collecting and saving pocket change won’t pay for your retirement, but it does add up. It’s amazing how much money you can store when you simply collect your change at the end of the day and put it in one place. Fill a jar or large container, and then roll the coins and deposit them into the bank.
   4. Take it one day at a time. Saving $1000 may be a slow proposition, but if you take it one day at a time, you can achieve your goal. Just set small goals for yourself and work to achieve them one at a time. What can you cut back on to save some money? How can you guarantee a few extra dollars to put into savings every week?
      • • If you put just $3 into your savings account each day with an interest rate of 1%, you’ll save almost $1100 in a single year. What small thing can you do today to save $3? Ask yourself this question each day and watch your savings grow!
        • If you put just $5 into your savings account each day with an interest rate of 1%, you’ll save more than $1800 in a single year.
        • Make small sacrifices to arrive at your savings goals. You don’t have to give up your favorite things; just take each day as it comes and make good choices on your spending to pocket as much extra money as you can.

Small steps toward saving money can add up significantly over time. Plus, these small steps get you into the habit of saving as a regular part of your daily routine. Start saving today and you’ll have an emergency fund in no time!

When most of your money goes toward providing what’s most important to you, you tend to live a more fulfilled life and feel more satisfied with the way you spend your money. It’s also easier to stick to your personal finance plan when its objectives are to get you what you really want out of life.

Because life priorities can differ drastically from person to person, it’s important to be aware of your own personal values.

What do you really want from life? What kind of lifestyle do you seek? What are your life goals? Does your spending reflect those things?

Follow these steps to help determine if your finances are in alignment with your priorities:

1. 1. List your priorities. You might notice different levels of priorities as you write yours down. Things like having a place to live and plenty of food to eat are your basic priorities.
      • • However, you’ll most likely include some “necessary” priorities to ensure a strong future for yourself and your family members, like maintaining good health or providing your kids with a good education.
        • Also, list things you love to do that seem more like “luxury” priorities, like reading, traveling or playing golf. These might be on a lower level of priority than your basic priorities, but, nevertheless, they’re still important to you, so include these as well.
          
          
   2. Now, write down how you spend most of your money. Where does it go? Although you may get annoyed that much of your money goes toward the mortgage or paying rent, the fact is that we all require a roof over our heads.
      • • You might consider the type, size and expense of your home and whether you’ve gone too far in terms of house expenses. If so, where you live and the mortgage/rent payments might require re-evaluation on your part.
        • Maybe a good portion of your dollars goes to other necessary expenses like groceries and paying your utilities. But what else do you spend your money on?
        • Do you play slot machines on Saturday for fun and end up losing money? Maybe you love to shop and use shopping as a pastime that ends up costing quite a bit. Perhaps you spend $20 a week on coffee and snacks or $30 a week having drinks with your friends.
        • Thoughtfully consider where your money goes from week to week and write it down.
          
          
   3. Finally, compare your lists. Take a look at your first list, the one with your priorities. Ponder each item; does every item accurately reflect what’s important to you? Now examine your second list, the one showing where your money goes. Do the lists appear connected?

Does your money go mostly toward your priorities?

• • You might be shocked to learn that, even though you listed certain priorities like providing a good education for your children or having a comfortable home, you’re spending $100 plus a week on eating out instead of starting an education fund.
    
    
  • What if you listed reading as one of your priorities, yet you spend nearly $100 a month on cable television you don’t watch much? Or if you do, it’s the same 3 channels that you’d actually get on a basic cable plan costing less than $40 a month.
    
    
  • In either case, you’ve got to ask yourself, “What are my true and real priorities” and “Why aren’t I putting my money toward the things that matter most to me?”

Having great clarity in knowing your priorities and being conscious of how you spend your money will help you routinely place money toward what’s most important to you. Then, you’ll like the way you feel about your finances as funds become available for your favorite things.

Personal finance still isn’t required in high school or college. This results in many young adults not having a good foundational knowledge of how to manage their personal finances. Fortunately, this subject isn’t complicated. A willingness to learn and do a little reading is all that’s required.

With a small investment of time and energy, anyone can become fluent and knowledgeable on the topic of money. The payback on this small amount of time and energy is priceless. Money challenges are a major source of stress for most adults. You can avoid these challenges.

Add these 8 simple tips to your financial knowledge:

1. 1. Be responsible for your finances. While there are many great money experts that can help you with your finances, the personal finance field is also full of unscrupulous people.
      • • Take the time to read topics that pertain to your finances. Pay your own bills. Stay on top of your money. Avoid leaving the responsibility to someone else.
          
          
   2. Be aware of how you’re spending your money. Setting up a simple budget is the first step. Then track how you’re spending every cent, at least for the first couple of months. Everyone is surprised by how their money is being spent when they take the time to really examine the issue.
      
      
   3. Learn the differences between ‘needs’ and ‘wants.’ It’s not always easy to deprive ourselves of the things we desire. But if you can to say ‘no’ when it’s appropriate, you’ll eventually be able to purchase essentially anything you could ever want.
      • • Many financial challenges are created by poor impulse control. This includes purchasing things you can’t afford and things you don’t really need.
          
          
   4. Keep track of your credit score. Credit scores become more important every year. It’s common for credit reports to have errors, so be sure to review your credit report every year. Take the time to learn about credit and how to build a strong credit profile.
      
      
   5. Don’t wait to start funding your retirement. If you get started early, you can save a lot of money quite easily. A little bit grows into a lot over 40+ years. Compound interest works like magic.
      • • If your company offers a retirement plan, be sure to take full advantage. The tax savings and convenience are spectacular. Your company might even match your contributions.
          
          
   6. Invest in your career. Spending money to further your earning power is money well spent. This can include job-related training, books, and formal education.
      • • Hiring someone to mow your lawn isn’t out of the question if it permits you to spend time on more important, career-related activities.
          
          
   7. Protect your health. Health insurance is very expensive for most people, but hospital bills are even more. Do everything you can to be as healthy as possible. And find a way to afford health insurance.
      
      
   8. Have reasonable expectations. It’s unlikely you’re going to be living like your parents when you first head out on your own. It will take time to accomplish what your parents have spent years building. Patience is critical.

Many older adults wish they could go back in time and handle their finances differently. You’re in an ideal position to get started down the road to a healthy financial future. Take advantage of your unique situation. You can have a life of financial security. It’s much easier to avoid mistakes than it is to fix them.

Just like you go to the doctor and the dentist regularly for a checkup, it’s also a good idea to give yourself a regular financial checkup. While you still might have 15+ years until retirement, you’re not a kid anymore either. It’s probably time to take a hard look at your financial situation and make some adjustments for the future.

In analyzing your finances, consider your answers to these key questions:

1. 1. Will your retirement savings be adequate? Are you likely to have enough money to live comfortably when the time comes? Are you saving enough each month? There are many online financial calculators that will enable you to determine if you’re on track.
      • • A good rule to follow is to plan for 80% of the income you had before retirement. Most people are satisfied and comfortable with this income level during retirement.
          
          
   2. How diversified are your investments? Diversification is important, primarily because it limits the amount of money you can lose. It also maximizes your earnings. For example, when your stocks are doing poorly, bond-related investments tend to do well and vice versa. Precious metals tend to do well in periods of high inflation.
      
      
   3. Are you maximizing your profits with tax deferred accounts? Certain types of investments create a larger tax burden than others. It makes sense to be sure that the investments that will be taxed at higher rates are in tax-deferred accounts like your 401(k) and IRA
      • • As a general rule, stocks held for over a year are taxed at the capital gains rate. Short-term stock trades and bond interest are taxed as income.
        • Studies have shown the allocating your assets into the proper accounts can affect the value of your holdings by 10% over a period of 10 years, creating a significant difference in the value of your retirement savings.
          
          
   4. Can you reduce your debt level? Debt can eat away at your ability to retire as well as your sense of well-being. It’s important to know how much you owe and the interest rates you’re paying so you can make a plan for paying off your debt in the shortest amount of time that’s feasible for you.
      • • Debt effectively reduces your income; it’s like a long-term pay cut.
          
          
   5. Is your estate planning up to date? Do you have a will that takes into account your current situation? Do you have a durable power of attorney or a health proxy set up? Are the beneficiaries for your retirement accounts named properly?
      • • These are just a few things you should consider. No one likes to think about this stuff, but these details are critical for you and your loved ones. Speak to your attorney as needed.
          
          
   6. Is your insurance sufficient for your current needs? Do you have enough insurance? Are your policies up to date? At a minimum, take a look at your life, health, homeowners, disability, and liability policies to be certain they’re adequate.
      • • Contact an insurance professional if you’re uncertain about your coverage.

Give yourself a financial checkup so you can be sure you’re on the right track. It’s the smart and responsible thing to do. Once a year, sit down and look over everything. Simply make the necessary adjustments and create a plan to improve your current financial situation. You’ll be glad you did!

Finances can be complicated! However, the simpler your finances, the easier they are to conquer. A few simplifications can renew your enthusiasm for finally mastering your finances. Many of the simplest actions you can take are the most effective. Making a habit of these simple actions is a sure way to ensure your financial life flourishes.

Simplify your finances and simplify your life:

1. 1. Simplify your financial accounts. Do you really need three checking accounts, two savings accounts and multiple retirement accounts? Unless you own your own business, it’s unlikely you require more than one of each. Pick the best and ditch the rest.
      
      
   2. Pay your bills once a week. Have a scheduled day each week to sit down and pay your bills. Having a scheduled time will ensure that no bills are “forgotten”. Pay everything on time. Leave enough time to ensure that all payments post on schedule.
      
      
   3. Use electronic bill paying. Not all electronic bill paying systems are automatic. Most checking accounts will allow you to pay any bill you like online through your checking account. You can set up automatic payments or you can pay manually. Most importantly, you avoid the need for paper checks and stamps.
      • • Automatic bill paying works best with bills that have consistent payments, such as mortgage, automobile, and other types of loans.
          
          
   4. Consider level-paying your utilities. Budgeting can be enough of a challenge without having to incorporate high electricity bills in the summer or high gas bills in the winter. Using your utility company’s level-pay option can keep your utility bills predictable.
      
      
   5. Automate your savings. Save first and save automatically. If you’re still trying to save whatever money remains at the end of the month, there’s a good chance you’re struggling. Expenses tend to expand to meet the availability of funds. Have money taken out of your paycheck before the opportunity to spend it presents itself.
      • • Your employer’s human resources department should be able to help you. If necessary, just put the amount you’d like to save into your savings account as soon as you receive your paycheck.
          
          
   6. Review your spending once a month. At the end of each month, account for every penny spent. Use a spreadsheet or financial software to chart all of your spending. You’ll find that you’re spending more than you think in certain areas. Those morning coffees, work lunches, and happy hours might be costing more than you realize.
      • • Reviewing your bills and other spending is one of the most effective ways to enhance your budgeting activities.
          
          
   7. Re-evaluate your financial recordkeeping system. Most of us keep more paperwork than necessary. Speak with an accountant and determine how long to keep each type of record.
      • • Most importantly, be organized. You can set up your filing system by the month or the bill.
        • Most items necessary for tax purposes can be kept for a maximum of seven years. Most other records are safe to discard at the end of the month. Remember that many records are available online.
        • Do you really need to know how much you charged on your credit card 3 years ago? Does your cable bill from last April need saving? Probably not.
        • Place current bills in one location to avoid loss. Keep your shredder handy and use it when the time comes.

A few simple adjustments to your personal finances can make life much easier. Develop systems and habits that ensure the most important financial activities take place each month in a timely manner. Habits and consistency are a key component to a simple and productive financial life.

Does financial freedom seem like an unreachable goal for you? For some, the only goal in sight is getting that next paycheck so you can pay the bills before services get disconnected.

Even if your current situation seems dire, there are things you can do to achieve financial success. Options that can improve your financial situation are all around you.

When you want to move your financial life forward, the first step is deciding on a worthwhile goal. What do you want to see happen? When? As soon as you’ve made that determination, you can begin marching toward your success in a step-by-step fashion. A worthwhile goal ensures you know where you’re going before you set out on your journey.

Long-Term and Short-Term Goals Are Both Critical

You might have a short-term goal to pay off a credit card and a long-term goal to pay off your mortgage. Those are both reachable, but one will take longer than the other. Makes sense, right?

Well, that’s why it’s so important to set a realistic timeframe for your goals! Stay encouraged by tracking your progress along your planned timeline. When you see a goal getting closer to achievement, you’ll become more excited and motivated to keep moving forward.

If you only set long-term goals, the payoff is too far away to provide any real motivation. These goals take a while to achieve and the lack of immediate progress may make you want to quit without shorter-term goals to look forward to.

The goal is to set long-term goals and couple them with short-term goals that excite you. Or, break your long-term objectives into short-term milestones that provide encouraging feedback on your progress. That way, you remain interested in pursuing your financial success.

You Can Get There From Here!

Too many people get discouraged and stop working for their goals. Don’t let this happen to you! Avoid allowing yourself to end up financially stuck and struggling because you let setbacks derail your train to financial success and prosperity.

Instead of giving up on your success and stopping yourself from living the good life you deserve, use these strategies to move forward:

1. Reap your rewards along the way. Set realistic goals and reward yourself when you meet them. Divide your large goals into small steps and celebrate completing each step.
   
   
2. Be flexible. Be willing to move your completion dates if you see they’re too soon. If you experience a setback, learn from it, adjust your goal’s completion date, and continue moving forward.
   
   
3. Stay focused on what matters to you instead of getting sidetracked. Remember the reasons why your success is important to you when the going gets rough.
   
   
4. Make the work toward your dreams more enjoyable. Moving forward doesn’t have to be all tedious work. Include goals in your life for things you enjoy, too.
   
   
   • Turn your hobby or other enjoyable activities into a profitable venture.
   • Ask yourself how you can make tasks you dread more fun.
   • Include a friend.
   • Make it a game with yourself.
   • Whatever you do, keep a spirit of playfulness in your work and success is sure to follow!

Your hopes and dreams are what fuel your happiness. You deserve a life that’s filled with rich experiences, meaningful relationships and inner peace. With a positive mindset and a determination to succeed, you can achieve all of this and more. Financial independence and the dream life you seek are within your reach.

When you reach your goals – even the small ones – you set yourself apart from most people, who dream big dreams but stay on the sidelines of life.

Get in the game!

Brainstorm the short-term and long-term financial objectives that matter to you. Pick the most important ones, sketch out a plan, and take the first steps toward your financial success today.

The 2014 Financial Literacy Survey, conducted by the Harris Poll, indicates that 61% of Americans don’t use a budget! Are you one of these 61%? If so, you’ll be glad to discover that it’s fairly easy to create a budget that will help you gain control of your finances!

Creating an effective budget has a number of benefits. By adopting a budget, you can make solid plans to achieve your financial goals and live the good life you deserve.

The best budgets are simple to follow, promote sound financial habits, and leave some room for a bit of fun and spontaneity.

Follow these steps to begin creating a budget that works for you:

1. Identify your income. You need to know the amount of your total income before you can decide how to save and spend your money.
   • • Get started by making a list all of your sources of income, the amounts, and how frequently you’re paid.
     • Common sources of income include the paycheck from your regular job, as well as additional revenue streams. Additional income could come from a hobby or in the form of an irregular source, such as money earned from a yard sale.
       
       
2. List and categorize all of your expenses. When creating your budget, carefully categorize and consider what portion of your income you’re using on various types of expenses.
   • • Many budgeting templates advise you to classify your expenses into two categories: fixed and variable.
     • If you have difficulty setting aside portions of your income for emergency savings and other financial goals, it can be really helpful to further categorize your expenses in terms of wants and needs.
     • Fixed expenses are those expenses that regularly occur for a set amount. Rent or mortgage payments, car payments, and insurance premiums are often different types of fixed payments.
     • Variable expenses occur at irregular times or for irregular amounts. When creating a budget, it’s important to have the means to accurately forecast the amount and timing of your variable expenses.
     • One sure fire way to save more of your income is to consider whether an expense is a true want or need, and reduce spending on the items that you merely want. This is a bit trickier than it sounds. For example, most of us would agree that food is a necessity, but the type of food that you choose to buy may reflect a want versus an actual need.
3. Leave room in your budget for a bit of freedom and excitement. Achieving a proper balance between spending and saving allows you to do things you enjoy while increasing your control over your finances.
   
   
4. Consider both sides of the equation. Just as you’re tracking your expenses and setting goals to reduce spending, look for ways to increase your income.
   • • Taking on a second job during your spare time or selling off items that you infrequently use are two common ways to increase your income.
5. Eliminate tedious or boring budgeting tasks. You can maintain your enthusiasm to stick with your budget by using budgeting tools that automatically record and track your financial transactions.
   
   
6. Keep your budget relevant. Review and adjust your budget on a regular basis to account for revised goals, fluctuating costs, and other changes.

A budget is an indispensable tool that can give you greater control over your finances. These tips make it easy to create a realistic budget that will work for you.