Want to know how you can improve your money management? If you’re looking to make smarter financial decisions this year, take a peek at these common suggestions from financial advisors.
The reality is, as of 2022, the federal reserve reported that roughly half of Americans hadn’t saved for retirement at all and the combined household debt of all Americans rose to over $18 trillion in 2024.
While reckless spending or avoiding thinking about money can feel good in the short term, taking control of your finances means a better quality of life and lower stress levels in the long run.
Plus, better budgeting can mean more money in your pocket for the things that really matter. One way to spend smarter and save? Refinance your vehicle loan with Auto Approve and find a rate that works for you.
Shore Up Your Personal Finances with These Tips
Each of these suggestions comes from reliable online sources in the money management world. For personalized advice and to make sure you’re making the right moves for your unique situation, be sure to speak with a financial advisor directly.
1. Save more for the future
Unless you happen to be one of the less than 9% of Americans with at least $500k saved for retirement – which is, by the way, estimated to cost about $1 million, depending on personal circumstances and spending habits – most financial professions would likely suggest you make a plan to save more as soon as possible.
There are many different ways to save for emergencies and retirement – Health Savings Plans, 401Ks, Roth IRAs, simply buying bonds to grow your cash – and choosing the right one for you depends on your job. But however you do it, saving money in case something happens or to allow you to eventually retire is one of the most responsible financial actions you can take.
2. Make and keep a budget
Whether you’re looking to actively save more or one of the roughly half of all Americans who’ve had to carry credit card debt within the last year, sitting down and making a budget can be a huge help.
Many financial gurus recommend subscribing to the 50/30/20 rule – meaning 50% of your income goes to needs, 30% to wants, 20% to savings or paying down debt.
For many people, simply taking a close look at their finances can be intimidating. However, the more you know what’s coming in and going out of your accounts, the better a handle you’ll have on your finances. Having more control over where you’re spending and when means you can choose when to splurge and on what so you get the most out of your money.
3. Learn about investing – and then do it!
First, you should know that every investment comes with a certain level of risk, and that you should only take the risk you’re comfortable with and can afford. That said, broadly speaking, investing – especially in relatively stable places like index funds and ETFs – is the easiest way to make sure the money you save keeps up with the market over time.
To be clear, you should still keep an emergency cash fund on hand, plus enough for your expenses. But once you’ve done some saving, it’s financially wise to start thinking about putting some of those savings into a diverse portfolio of investments, whether that includes Certificates of Deposit with guaranteed interest, buying property, or entering the stock market.
A good financial advisor will make sure you understand the risks of any choices you make and sound investing principles, but for now, you can read up on the basics.
4. Manage debt thoughtfully
Most finance folks would agree that there is good debt and bad debt.
Good debt typically includes debt that acts as an investment in your future – think student loans and mortgages.
Bad debt includes things like payday loans and credit card debt – high interest borrowing that can get you caught in a debt cycle. These debts can drag you down financially without offering much benefit to you in the long term.
Paying down a credit card every month and building your credit can be a good thing, but be careful about borrowing for discretionary purposes like vacations.
If you’re someone who has struggled with debt, there are tons of resources available to help you figure out how to set yourself up for success in terms of paying down your debt and getting your finances back on track.
5. Pay attention to your spending
As well as keeping a broad budget, it’s always a good idea to actually audit your individual costs, especially if money is tight. You can save money at the grocery store, at the pump, and throughout your budget with a little bit of care and attention.
Subscriptions and other recurring fees are one of the easiest places to get dinged by forgetting about a free trial or not noticing the creep up of a monthly bill. If you want to reduce your spending, you can look for forgotten subscriptions, see if there are ways to get your bill lowered, or cancel certain subscriptions until you need them.
You may also be able to lower your monthly expenses by lowering your payments on leases and mortgages through refinancing. At Auto Approve, we work with you to find the best deal for you on your vehicle loan refinance. Then we do the paperwork for you, making it easy switch loan providers.
Most people are overpaying on their auto loan, because car dealerships typically markup their rates. That means, if you got your loan through a dealership, you’re likely eligible to pay less per month with a lower rate.
Get Your Finances In Tip-Top Shape With These Money Management Tips
Money matters don’t have to be difficult or intimidating. The best thing you can do for your financial health is to take a close look at what you’re earning, what you’re spending, and how you’re spending it. Once you’re intimately familiar with your personal finances, you can take charge and make sure your money is working for you, today and for years to come.
Consider saving for your future, keeping a close eye on your budget, investing wisely, avoiding or paying down bad debt, and exercising discretion in your spending. With thoughtful application of these tips, guided by your financial advisor, your finances can be healthier than ever.
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