Making smart financial choices increases your ability to achieve your financial goals
In order to achieve your vision for your life you need to have goals. Once you have set goals you will make daily financial choices that affect the success of meeting those goals. At times we all get distracted or have a temporary lapse in the quality of our choices. But over the long term it is important to achieving your goals that you make smart financial choices.
Here are 5 ways you can be smarter with your money:
- Create a budget– Do you know where your money goes? Do you have a positive cash flow? If you answer is no to either of these questions (or I don’t know!), you need to create a spending plan (budget). We all know how important it is to live within our means but it is equally important to identify where your money is being spent. Creating a spending plan also helps you identify areas where you can potentially reallocate to fund your goals.
- Reduce credit card and other high interest debt– Making sure that you maintain a good credit history is one of the most important steps you can take. Take steps to reduce credit card and other high interest debt. It is also important to have at least one credit card in your name.
- Take an active role in your investments including your retirement plans-Stay informed and engaged by reviewing your statements and consulting with your advisor when you have questions. Besides reviewing your statements, you should also read financial magazines or websites and attend workshops.
- Don’t be overly conservative with your investments– Women typically live longer than men. You should invest based on your risk tolerance and time horizon but not be overly conservative. At least part of your portfolio should be invested for long-term growth.
- Consider working with a financial planner-A financial planning professional can help you translate your information into some realistic goals so that they can develop strategies that make sense for you. It is important to work with an advisor you trust and that truly understands you, your goals and your situation.
Being smart with your money is about making good financial choices that are in alignment with your financial goals.
Remember, you are the CFO of your life! It is important to take some time to plan your finances before the end of the year. These five strategies can help you build the financial future you desire in 2016. If you don’t want to go it alone in the new year, consider checking out my step by step process to help you gain the confidence and awareness in building the financial future you desire. My course Building Your Dream Financial House starts January 5, 2016. For more information, please click here.