The journey of a thousand miles starts with a step
For many, money management can seem like an all or nothing endeavor. But it isn’t. Granted, at some point you’d need to have that major sit-down to go over the big picture. However, life can get busy. You have work, family, and other obligations/responsibilities that can make procrastination effortless.
As such, it is expedient not to push forward crucial financial actions you have to take to a far-flung date in the future. You can actually start now by sparing a few minutes to make some smart and painless money moves to rack pretty significant wins.
These small steps add up, not only financially, but also psychologically. By doing the little things and seeing positive impact on your financial wellbeing, you gain the confidence, positive feedback, and momentum needed to tackle bigger things.
But… Where do I start?
Itemized below are a few no-regrets financial moves to take. Don’t only scan through them. Act on them. If you’ve done some of them, good on you. Now do the others. If you haven’t done any: Well, now’s a good time as any to get going.
1. Track your money better
In our article on the rudimentary ways to improve your finance (it covers the basics), we recommended tracking your spending, even if that meant using only a pad and a pen. That makes for good groundwork to build on, because yes, it is possible to track your money better… The way millionaires do.
You want to stay on top of your entire financial position. That implies every aspect of your wealth is under the magnifying glass—from budgets to investment performance.
Using a pen and paper for that is akin to the stone tools used by the cave man. You’d need a more robust platform like Personal Capital to make it infinitely easier to manage it all. It has 50+ amazing features to keep track of your spending and savings goals, accounts, and even your retirement progress. Best of all, it is FREE.
2. Increase your income
There’s only so much you can do with your current income. And even if things are slightly manageable for you, it wouldn’t hurt to increase the flow of your income stream. You’d be able to save more as well as put away more towards investing and your retirement.
Survey websites are a good choice. Get paid for sharing your honest opinion about products and services. It pays less than being a guinea pig to test drugs (with a particularly lower risk of course), but it can be worth it. Some of the best survey sites include:
- Earning Station
- Inbox Dollars
- Ipsos I-Say
- MyPoints [Desktop, Mobile]
- My Survey
- Opinion Outpost
- Pinecone Research
- Survey Club
- Survey Junkie
- Vindale Research
In general, several of these survey sites offer other GPT (get paid to) actions. For instance, MyPoints would pay you to shop at your favorite retailer through their platform. That said, the survey type (product or service you’re asked about), breadth and scope of the survey, and pay vary between survey sites.
Furthermore, the payment schedule differs between sites, as the industry standard is for compensation to be sent after accumulating a certain amount. Compensation could be in form of coupons, gift cards, checks, or direct deposit to your PayPal or bank account.
The rule of thumb is to join/use as many survey sites as you can, so you aren’t leaving any money on the table. And the payout will be significant when you lump together proceeds from the various sites.
Other alternatives to survey sites include:
- Swag Bucks. Get paid to perform everyday tasks on the Internet, like searching or online shopping. It has an impressive Trustpilot rating of 8.4. And has paid out over $250 million to members.
- Nielsen Panel. Earn $50/year to run a program on your computer and use the Internet like you normally would. It is run by the same company behind the popular Nielsen ratings for TV that’s been going strong for 90 years.
Go the whole nine yards to make more money from your home with AirBnB or with your car using Lyft. AirBnB allows you to rent out a spare room (basement or a house even) with ease. You could potentially live for free. Lyft is a decent side hustle to make a few bucks by driving people around.
Saving makes achieving financial stability a lot easier. Having a certain amount set aside to take care of any emergency will set your mind at ease. It’d also start a chain reaction that’d see you saving more and having spare cash to invest in interesting opportunities. These investments would make you money passively and help fortify your financial future.
First, you have to open a savings account that offers an interest rate that’s much higher than the national average, at least tries to keep up with the inflation rate, and doesn’t burden you with any draconian rules or fees.
Most of the big banks pay next to nothing as interest, so you have to take your savings to a bank that appreciates it. CIT Bank’s Premium High-Yield Savings Account ticks all the right boxes.
- APY (interest rate) is 55%
- Minimum deposit is $100
- There are no monthly fees
- Deposits are FDIC insured
Next, you have to enact two simple rules for this account. One, you’d save enough money for emergencies in it (experts recommend 3-6 months of living expenses). Two, you’re not going to dip your itchy fingers in it. It’s off limits until there’s an actual emergency.
At the start, you may have to set up an automatic savings transfer from your checking account to the emergency fund account. You don’t want a busy schedule, forgetfulness, or a couple of spending splurges to hamper your efforts to save. The Digit app can help.
With that done, you may then proceed to organize extra funds in separate bank accounts. Are you saving for a vacation? You may want to open an account for that. Don’t lump it in with your savings. It’s not smart either to keep it in your primary checking account. As you well know, we aren’t always rational with money. Don’t tempt yourself.
Opening several accounts, each with a specific purpose is brilliant to help you stay on budget, prevent overspending, keep avoidable debt (like overdraft and using up credit cards) at arm’s length, and track your spending better. For instance, you may want to have one checking account for bills, another for groceries, another for entertainment… you get the point.
If your bank doesn’t let you use multiple accounts with ease, find one that will. Talking about ease of usage, take advantage of Personal Capital to have an eagle eye view of all your accounts.
4. Refinance or consolidate your high-interest debt
For starters, brush up on your knowledge of how they differ using this handy, concise guide. For most people, refinancing is the route of choice and it’s mostly used for student loans or credit card debt. In reality, it applies to virtually any loan with a high-interest rate that feels burdensome.
The primary reason to refinance is to get a lower interest rate. If your monthly payments are lower, you can divert more money towards the principal, and/or eventually be able to pay off your debt faster.
With the average credit card interest rate at about 15%, a service like Credible that provides an array of lenders that can help refinance credit card debt to as low as 4.99% is at least worth investigating or giving a shot.
It’s also amazing for refinancing both federal and private student loans. The average amount a Credible user saves by using the service to refinance their student loans is a very substantial $18,688. In addition, Credible offers a welcome/signup bonus (hey, I’d take that) for approval.
Alternatives to Credible are LendKey and Even Financial.
Still on the topic of paying off your debt, the app Unbury.Me is great for creating a plan to assist your efforts based on your preferred debt repayment technique (lowest principal first or highest interest first)
5. Invest for the future [you]
Your state of affairs may be just okay or manageable right now as you still have a paying job. However, you’re going to have to stop working at some point (best case scenario, you retire voluntarily when you’re older; worst case scenario, you’re forced to—an accident, limited opportunities, or something else).
Even if you’re more of an in-the-moment person, it wouldn’t hurt to have more disposable income to fund the things you’d fancy in the future. Fortunately, investing is a rather diverse venture. Investment options are aplenty; there are lots of accessible, detailed information on any option if you make out the time; and there is a vast array of opportunities for every risk appetite.
Invest in Vanguard or alternative funds
Go all in on your 401(K)
If you’re in a position to max out your 401(k)—not everyone is in such a position at all times (alt reading)—do not hold back. At the very least, try to contribute up to your employer match; that’s free money you shouldn’t turn down.
If you can’t drastically hit the target number, increase your contributions gradually.
With that out of the way, you shouldn’t assume throwing in money into your 401(k) is all you have to do. Some retirement plans have high fees and expenses and/or have an investment lineup that isn’t up to snuff. It’s the equivalent of assuming you’re getting the best savings rate with your bank.
You’d need a bit of research and time to work out the allocations, indexes, and long-term planning involved to know if your retirement account is crushing it. If for some reason that’s not something you’re able to do, you should certainly use the service Blooom (that’s 3 o’s) to analyze and optimize your 401(k) on your behalf.
It’s hands-off for you, free to try out, and better than hoping for the best when there’s something you can do.
Here’s something to jive you up, a Morningstar Research study found the average expense charged by ETFs and mutual funds to be 0.61%. Doesn’t sound like much: But for a $100k investment; that’s $610 in fees per year. At a 9% interest rate over 25 years, that $610 p.a. fee actually amounts to $57,100.
The average Blooom user cuts hidden investment fees by 46%. The collective lifetime fees Blooom users saved using the tool is over $800m and counting. Get your FREE analysis.
If you’re eligible, get that Roth IRA on lockdown.
Invest in real estate
There are more than half a dozen ways to get into the famed real estate playground. But it’s easy to underestimate the capital, legwork, or experience needed to make most of them work—be it flipping or rental.
Thankfully, there are a couple of alternatives to take the sting out of the traditional hands-on methods. One is the time-tested REITs—companies that take money from investors (aka folks like us) to purchase property, manage it, and rent or lease it to residents or businesses for income.
They do all the work for you; you only have to do your due diligence before investing in a company.
The REITs pay out this income to investors as dividends. They are required to pay out at least 90% of taxable income. REITs collectively own around $3 trillion worth of real estate in the U.S.
You can invest in a publicly traded REIT through a broker like Ally Invest with ultra-low fees, as you would in a mutual fund or stock. In fact, they could be independent holdings or part of your Roth IRA retirement portfolio for diversification.
Aside REITs, you may invest in real estate ETFs and mutual funds as well through Ally Invest.
Alternatively, you could invest in more recent real estate crowdfunding disruptors like Fundrise that substantially cut fees and front-end load (only 1% in annual asset management fees; in comparison, front-end costs with traditional REITs can be up to 15%). As well as make it incredibly easy for the average person to dip toes in.
Invest with as low as $500 in a couple of minutes without hassle and monitor your investment on the go. Granted, you can’t pull out your money as easily as you would with a public traded REIT, they are by design meant to be held for the medium- to long-term (5+ years).
However, you can liquidate your investment once every quarter. You may also invest in Fundrise with pre-tax dollars for retirement planning via self-directed IRAs.
Invest in the stock market
Every now and then, we’re reminded of just how great the stock market can be—if you invested $1000 in Apple stock in 2008, it’d be worth at least $9,000 in 2018 after Apple became a trillion-dollar company. Stretch back to the IPO in December 1980, and a $1000 investment then will be worth $8.9 million in 2018.
However, it’s also understandable to brood on the numerous stock downturns—there’s been at least 10 such episodes since 1980; not to mention companies underperforming (looking at you Staples).
Nonetheless, the annual average stock market return is 10%, which is way more than banks will give you on savings or CDs. Remember to use a feature-rich broker with low fees, we recommend Ally Invest—fees are as low as $3.95 per trade as against some brokers charging up to $10 for trading fees.
If you’re having issues making out the time or setting aside the cash for investing in stocks, how about doing it subconsciously. Sign up to the Acorns service that’d round up your card (both credit and debit) purchases to the nearest dollar and invest the balance (change) in the stock market. It’d also give you generous rebates (cash back) on your everyday purchases—such as AirBnB, Uber, Walmart, DirectTV, Dish, etc.—which of course would be used to buy stocks and bonds.
6. Cut on fees and bills
Stop paying fees you do not have to pay? Seriously! Businesses won’t reject free money, so don’t be one of their suckers.
But what kind of fees can I cut on? Bank and credit card fees for starters.
Don’t know how to go about it nor have the time? No worries, use Cushion—a helpful automated bot—to eliminate fees including overdraft, ATM, late, minimum balance, foreign transaction, monthly service fees as well as credit card interest changes.
After ticking that box, look at your grocery bill and consider trimming it.
It may not seem possible, but that’s where a tool like PlateJoy—a meal planning service—come in handy. The service helps cut cost to as low as $2 per person (or less sometimes). The service will send you a delectable meal plan and shopping list every week. Try PlateJoy for a limited time at no cost.
Already getting the hang of it? Go further by lowering your bills.
You can either learn how to do so yourself—for common monthly expenses and for medical bills: A lot of things are negotiable (alt reading). Or, you could have BillShark—a pro negotiation service—do the heavy lifting for you.
The best part is you don’t share risk or pay anything out of pocket, BillShark would only take a cut of your savings if the negotiation is successful.
7. Save on car insurance
You can’t drive without car insurance. That much is certain. However, you have to make sure you aren’t overpaying for it. Quotes vary wildly across insurers in the same state: as such, you can’t assume the first quote you get is the best. It may very well be the case, but check around.
It doesn’t mean you’d have to visit every auto insurance firm in your vicinity or call several business lines to have the same rehashed conversation. It’s the golden age of the Internet, use Esurance to compare rates.
Comparing rates on Esurance is as easy as pie, it doesn’t take more than a few minutes, and it’s free. You could be looking to save hundreds, although you have to make certain you’re comparing apples to apples.
Alternatively, you could ditch the traditional insurance companies and go for a PAYG (pay as you go) disruptor like Metromile. The idea is simple: how about you ONLY pay insurance for the miles you drive. Surprise! Why is this just becoming a thing now you ask? Well it’s better late than never.
Metromile will give you a free quote. You can then compare it with your existing plan to see if there’s any savings to be made. If you are in, you get on the books with them, and they’d hand you a “Pulse” device, which you’ll plug into your car to track your mileage.
8. Consider life insurance
You’re likely to have had a passing thought about life insurance. Now is a time to really weigh it for its merits. If you’ve got dependents that could be in a rough spot should the unthinkable happen, it may be in your (and their) best interest to have a lush safety net to cover essential financial obligations.
Choices abound, and truth be told, the different types and finance jargon can be a tad overwhelming when you just want to figure which is best for you. However, the Insurance Information Institute has a short article that should keep things in focus (you’d want to do your independent research tho’).
Whatever type of life insurance you decide to get, you should compare quotes with PolicyGenius. It’d only take a few minutes to find free instant quotes from several top life insurance providers.
9. Avoid late payment
Credit cards are nice to have for the travel rewards, cash backs, and other beneficial incentives. But they can easily be a drain if you fail to pay off your balance when due. You’d have to deal with high interest and the dreaded late payment fee.
So it’s settled then, pay when due to avoid heartaches. Sometimes it’s easier said than done: overspending and plain ol’ forgetfulness can throw a wrench in your plans.
That’s where Debitize—a service that turns your credit card into a debit card—comes in. Here’s how it works:
- You swipe your credit card for a certain amount
- Debitize pulls that amount of money from your bank account
- It’d store and accumulate the amounts it pulls
- Then, it’d pay off your balances a week before due date automatically
It’s completely hands-off once you’ve connected your accounts, and you’d paying off your card balances will be one less thing to worry about. Which is amazing because you wouldn’t be forgoing the perks, rewards, and good credit score that comes with having a well-maintained credit card.
The actionable money moves that set you well on your way to financial independence do not have to be difficult or expansive in scope. Start simple. Start small. Make small wins and gain traction steadily.
In so doing, you’d begin to relish the satisfaction from seeing your baby steps and deliberate action hand you more control over your money. And that’s how you start to chart a more sustainable course for your finances, whether it entails paying off mammoth-sized debts, having a decent emergency fund, saving for college, or investing for the future.
Nevertheless, none of that will be possible, if you don’t act now.