5 Steps to Getting Your Finances in Order

You might think that your finances are so out of order that your financial house looks more like a run-down financial shack. However, there’s no reason that you can’t get back on your feet with some smart financial moves.

Here are 5 steps to getting your finances in order.

1. Always Save

Right off the bat, this might seem like the advice that you don’t want to hear, but you’re going to need to start saving. No matter how much it hurts, how difficult it seems, or how sure you are that it can’t be done, you need to put some money away every time you receive a paycheck.

At a minimum, take 10% of every paycheck and put it into a savings account. If possible, have your paycheck put into your account by direct deposit and delegate 90% of it to your checking account and other 10% of it to your savings account.

You don’t want to end up in even worse financial shape in the event that you’re hit with an unexpected and very expensive medical bill or emergency. To that end, keep some money stashed away for the proverbial “rainy day.”

2. Max out Your 401k

If your employer offers a 401k retirement plan, you should contribute as much as possible to that account. Not only will you be saving for retirement, but you’ll also be putting off paying taxes on the money you contribute until your retirement. So you give yourself a financial advantage for two reasons.

Also, sometimes your employer might match your contributions up to a certain percentage. That’s free money for your retirement.

Free money is good.

Keep in mind that you should readjust your retirement account as you get closer to age 65. If you have an AOL portfolio or you’re heavy in equities, it’s good to sell off some of those equities and move to bonds. That will limit your risk exposure.

3. Clip Coupons

You don’t have to be an extreme couponer to take advantage of savings at your local retailer. You can be a moderate couponer and still enjoy quite a bit of savings.

There are plenty of coupon sites online. Browse through them and find ways to save whether you are shopping online or at the mall.

Also, check your Sunday paper for coupons. Clip them and use them.

4. Do Some Comparison Shopping

Thankfully, you live in a capitalist economy. That means that businesses compete for your patronage. One of the ways they compete with each other is on the basis of price.

When businesses compete, you win.

Look for the best deals for the items you shop for regularly. If you save a little here and there on groceries, that will add up to a lot of money over time.

5. Ditch the Credit Card

If you want to get your financial house in order, you’re going to have to stop paying for things with a credit card. Otherwise, you’re likely to pay more for the product than the advertised price because you’ll also pay interest on the card.

If you want to teach children about finances, one of the best ways to do that is to lead by example and manage your own finances properly. Fortunately, with a little self-discipline and some knowledge about money, you can start doing that today.