You don’t need to spend a lot of money on a financial planner to achieve your personal finance goals. You just need to have the right information and tools to become your very own financial planner. Continue reading to get tips about choosing a budgeting app, dealing with debt, investing in your retirement and more.
Find Out What You Have to Work With
Trying to manage your finances will not be effective if you don’t know what you are working with.
It can be easy to bury your head in the sand when things look bad financially. To prevent this from happening, use budgeting software designed to help you track your spending. By using budgeting software, you will be able to see where your money is going – and where it can be saved.
A budget tracker will hold you accountable for your spending. And fortunately, there are many expense tracker apps to choose from.
One of the best money management apps is PocketGuard, which lets you know how much you can afford to spend on nonessentials at any given moment.
Another one of the best budget apps is Cleo. This app is designed for younger people looking to track their spending and get on top of their finances. It’s easy to use and includes artificial intelligence (AI), which allows you to text back and forth with the app as if it is a real person. This feature makes financial planning feel more personal and suited to your needs.
While Cleo and PocketGuard are good for day-to-day needs, you might need something a little more detailed for bigger financial goals. For example, the app Mint helps you budget and save while also letting you track and monitor your credit score.
Get Your Debts Under Control
Having a good debt management plan can be the difference between healthy or messy finances. It is important to analyze all your debts and come up with a realistic “get out of debt” plan that you are able to stick to.
A good place to start is paying off your credit card debt. If you have more than one debt, you may be able to pay off your total debt through credit card consolidation. You can consolidate your credit cards through either a balance transfer onto one low-interest card or through a personal loan.
You can even speak to a credit or debt counselor for free or a for small fee through an accredited nonprofit organization. Working with a counselor can help you save money and develop a good debt management plan to clear your debts within a specific time frame. Your advisor can talk to your creditors to come up with an agreement for clearing your debt that suits both you and your creditors.
Once you agree to the plan, it is important to make regular payments. Paying down your debt regularly can have a good effect on your credit score, which may have been damaged by your debt history.
When you start out with investing, you might be tempted to jump in at the deep end in the hopes of getting lucky (or rich) quickly. But expert investors will tell you that low-risk investments are preferable, especially in your early days of investing. Investing in diversified portfolios like index funds, mutual funds or exchange-traded funds (ETFs) has a lower risk than investing in individual stocks or other single assets.
Index funds, mutual funds and ETFs are companies that pool money from various investors. The money is invested in a variety of stocks, bonds and other assets. When you invest in one of these funds, you own part of this collection of investments, also known as a portfolio.
One of the best mutual funds is the Fidelity Contrafund, which has had a solid record of growth over the last 25 years. Making a smart, affordable investment in a diverse portfolio like this has its advantages, The main advantage is that these funds give you access to a broad market and carry a relatively low risk. If used wisely, these investments can help you afford a comfortable retirement.
Plan For Retirement
Retirement planning is a key part of being your own financial planner. While you may be in a good position throughout your working life, you want to make sure you can enjoy your retirement as well.
Some financial planners choose to open a Roth IRA, which is a type of individual retirement account (IRA) that has certain tax advantages. With a traditional IRA, your contributions are tax deductible in the year that you make them. However, you are taxed when you withdraw the funds in retirement. With a Roth IRA, the opposite is true.
Both types of IRA can be good, and which one will be best for you depends on your circumstances. At retirement age, you will likely be in a different tax bracket. If you think you will be in a higher tax bracket after retirement, a Roth IRA is the way to go. Using an IRA calculator is a good way to see which will give you the most fruitful outcome.
Additionally, it is important to speak to your employer about your 401(k) retirement account if they offer this benefit. Employers will often contribute to the account, and knowing how they match your contribution will give you a clearer picture of your final sum at retirement.
While it is vital to monitor your investments as you head towards retirement, you can also take practical steps such as ensuring good health to avoid unnecessary and costly medical bills.
Find Free Or Low-Cost Financial Advice
Some financial consultants charge a lot for their services, but fortunately, there are low-cost or free financial advisors available.
Today, technology has given us the ability to get free financial advice through things like robo-investing. Robo-investing is a relatively recent concept that allows a virtual robo-advisor to offer you financial advice and make investments on your behalf.
Some of the best robo-advisors can help with portfolio management and financial goal setting. These programs generally come with low fees and strong account security.
One example of robo-advising software is the Vanguard digital advisor. It not only provides you with a completely personalized experience, but also allows you to stay on track with your retirement goals, putting you in the best position for the future.
Additionally, there are also many nonprofit organizations that offer free financial advice. Places you should look to for free financial advice include credit unions, universities or military bases. If you are looking for human interaction in your financial planning journey, this may be the right option for you.