On the heels of NCAA March Madness, the NBA playoff season has begun. As you cheer on your favorite teams while they dribble their way towards the championship, Industrial Bank is providing you with game plan to help you be the G.O.A.T (Greatest Of All Time) at managing your money. Here are some tips to get the ball rolling on your finances:
1. Eyes on the ball
You’ve got to get your head in the game if you want a successful financial strategy. The first step in building a sound strategy is to identify your goals. Take some time to think about what you want to accomplish. Here are a few examples of goals you may consider:
- Planning for early retirement
- Establishing an emergency fund
- Creating multiple streams of income
- Setting up a college fund for your children
2. You can’t freestyle your budget
If you want to make it to the big leagues, you can’t just freestyle your budget. You’ll need to lay out a strategy, and you’ll need to stick to your plays. Here’s some advice to help you stay organized:
- Review your budget, income, and spending on a weekly basis. Set a consistent time every week to review your income, your spending, and how you’re tracking on your budget so that it becomes a habit. This way, managing your finances becomes a routine, not a chore.
- Learn to say ‘no.’ Whether it’s that impromptu take-out you ordered, or that casual trip to the mall which turned into a shopping spree, take a hard look at your expenses and decide to cut out the unnecessary ones. Your budget should be your spending guide at all times; by getting into the habit of being very selective, you can quickly accomplish your financial goals.
- Set a savings strategy and pay yourself first. One of the first rules of saving is to always pay yourself first. Set a realistic goal for weekly or monthly savings and stick to it. When you get paid, always put your savings and bill money aside first and then work with what’s left. That way, you can stick to your goals and avoid an inconsistent flow of savings.
3. Create an All-Star team
Think of yourself as a coach. As the coach, it’s your job to build a strong team by selecting the right players to help you achieve the goals you’ve laid out. Apply this mindset to your financial planning; identify people in your life that will help you accomplish your financial goals. Gather a team of friends, family members, mentors and associates that will motivate you to stay disciplined, provide advice and guidance, encourage you to stick to your plan. It is important to have a strong support system that will hold you accountable for your actions and steer you towards the path of financial success.
4. Make half-time adjustments
While it is essential to remain focused and stick to your game plan, keep in mind that the game is always changing. Sometimes, the ball can smack you right in the face out of nowhere and circumstances can change on a whim. Every so often, take a few moments to assess your budget and change strategies that are not working to allow yourself to be nimble and adapt to what life may throw at you…which brings us to the next point…
You can’t just rely on your offenses to win the game. Similarly, you can’t just rely on your income to build a strong financial strategy. Set a goal to build up your savings account for a rainy day. A good rule of thumb is to save up enough money to sustain yourself for at least 6-12 months. Additionally, consider these ways to boost your savings:
- Invest in the stock market. While complex and a little risky, many financiers find great short-term and long-term rewards by investing in the stock market. There are many resources online available for you to learn more about investing – you can start here on Investopedia.
- Start a side business. Channel your entrepreneurial skills and consider ways to make more money through a side business. Think about any skills or interests that you excel in and consider turning your hobby into a business.
6. Avoid these fouls
The game has rules for a reason- following them helps you avoid injuring yourself and others. The same concept applies to your finances; here are some things you should watch out for:
- Not having an emergency fund. Without an emergency fund, you could be unprepared to deal with a crisis. You may need sudden car repairs, receive unexpected bills or even lose a big bet on your favorite team (that’s never a good idea).
- Relying too much on debt to finance your expenses. While credit cards and loans can alleviate short-term financial needs, in the long-term you wind up paying more in interest.
- Neglecting your credit score: Your credit score represents your creditworthiness which affects your ability to apply for credit cards, buy a home, get a loan, and much more. Continuously monitor your credit score and focus on increasing it.
7. Lastly, anyone can play
Look at it this way – if you you don’t play, you can’t win. Not everyone can make it to the NBA, but in the financial game, you don’t need to be tall enough to dunk. You may be the super organized one that has everything planned out, the one who’s always finding the best deals, or even the one who likes to be out there and talk your way into closing a sale. Either way, you can use your unique skills to be successful.
Take a moment tonight, tomorrow morning or this weekend to lay out your game plan, gather your team and start on your road to the championship. It will take hard work and practice but the reward will be worth the investment.