On the Hunt for Financial Easter Eggs
Growing up, Easter meant driving up to my grandparents’ house in New Hampshire where the adults would place colorful plastic eggs all over property for the kids’ Easter egg hunt. As my elder cousins assumed the egg hiding responsibilities, they found craftier hiding places and we would still be finding eggs deep into the summer months.
Unlike those eggs, there are likely Easter eggs hiding in plain sight in your financial picture. Here are a few not-so-secret personal finance strategies to improve your overall financial health.
- Track your budget.
One of the most important strategies for unearthing hidden “Easter eggs” in your monthly budget is to keep careful track of your spending. Tracking your spending can help you to identify patterns in where you spend money, spot areas to potentially cut back and more effectively manage your money so that you’re aware of how each dollar is spent.
There are plenty of digital tools to help track your budget (we like Mint.com) or it can be as simple as an old-school pen and paper or a spreadsheet.
- Make note of reoccurring expenses.
With the convenience of modern technology, most folks have recurring monthly expenses set on automatic payments – be that rent or mortgage payment, utility bills, car payments, or other expenses. While this is an excellent strategy to avoid any late payments, it also can mean you lose track of where your money is going. As these reoccurring payments can be significant, it is important to monitor them carefully.
- Automate your savings.Saving money isn’t easy. Recent studies have shown that 40% of Americans don’t have enough money to cover a $400 emergency and only 39% have enough money saved for a $1,000 emergency. You’ve heard it before, but I will say it again, “pay yourself first”. An easy way to accomplish that is to set up automatic transfers to your savings account, investment accounts and retirement accounts.Did you know you can set up a reoccurring money link between your bank account and your accounts at Charles Schwab? If you need help, reach out to your Meridian team!
- Take advantage of the tools available to you.No matter your financial situation, there are tools that can help you achieve your financial goals. For example, if you have a child and are concerned about college, consider a 529 Plan to grow your investment tax-deferred for education expenses. If your employer offers a 401k or other retirement plan, max out your contributions to ensure you are not leaving money on the table. If you are self-employed, consider opening a Simplified Employee Pension (SEP) Plan.
- Schedule a time to evaluate your finances.No month is the same and inflows and outflows of funds are constantly changing. Take a moment at the beginning of each month to evaluate the previous and adjust accordingly.At Meridian, you can expect to hear from your advisor quarterly and we would be delighted to see you in person annually. But we are always available if you would like to chat more frequently or have any questions that come up.