Regret is not a fun feeling to experience. We’ve all been there, and focusing on what you could have done differently in the past will only rob you of your present time and happiness. Having positive financial aspirations will help provide you with joy as you move through life.
Here are five financial decisions you can focus your time on that you’ll surely never regret. (For related reading, see: 6 Life Events That Call for Professional Financial Advice.)
Pay Off Your Debt
In the society we live in it’s easy to forget about delayed gratification. Pretty much everything you’d ever want and need can be financed. Unfortunately, with debt and loans comes an interest rate that dwindles our net worth and saving accounts. Keeping your debt manageable or focusing on eliminating it all together will provide you with a healthier financial picture. (For more, see: Best 5 Money-Saving Tips to Get out of Debt.)
Focus on the Long Term
Financially speaking, focusing on the long term is something that will never disappoint you. The sooner we start planning for our children, life milestones and retirement, the easier those phases of life are. There are many options for saving and preparing long-term such as a 529 college savings plan, a 401(k), an IRA, or Roth IRA. Your retirement plan could depend on your employer and the benefits. The choice between a 401(k) or IRA will depend on your own personal needs and how much you wish to contribute to those accounts. (For more, see: Youth and Roth IRA Equals a Solid Retirement Plan.)
Save First, Then Buy
This concept is the opposite of how many consumers function financially. The logic we see typically is buy now, pay later. This is why we are a country that’s severely in debt. Not only is saving first and then buying beneficial to our financial health, but it’s also rewarding. When we save and work hard for something, we are likely to appreciate it more. We’re also more aware of the value of money. When we use lines of credit to purchase materialistic items that decrease in value as soon as it’s purchased, we’re less likely to value the dollar, resulting in too much borrowing, spending, and living outside of our means.
Grow Your Savings
Growing your savings is a suggestion you may have heard a million times, but it’s still so important. A good rule of thumb is to save first, then spend. One way to do this is by establishing a monthly budget. If you can set a realistic budget and live within your resources, you can put the extra money you’ve earned into your savings immediately when you’re paid. You’ll be so relieved to have a substantial savings built up when those unexpected life happenings present themselves such as the loss of a job, a big medical expense, or a large home repair.
Hire a Fee-Only Financial Advisor
Now we may be slightly biased on this last tip, but having an expert involved in your financial planning will help you maintain a healthier financial picture. You may find that choosing between a 401(k) or an IRA, planning your taxes, and maintaining little-to-manageable debt is easier with a financial advisor. It’s important to hire a fee-only financial advisor because they have a fiduciary obligation to act in your best interest. (For more on fee-only financial planners, see Should You Choose a Fee-Only Financial Advisor?)
These tips require patience and it could take you several months to implement each one; however, you’ll enjoy living a healthy financial life by accomplishing each step.