Smart Financial Decisions to Make Going Forward

It can be tough to improve your financial situation, enough so that you can have a better financial future. People may be helpless and not know where to start. Here's some tips from a reader on things you want to keep in mind to improve your financial standing.


Having a playbook for how to manage life would be nice, but life doesn’t work that way. It is easy to slip through life unsure how to manage the next emergency and just living paycheck to paycheck. While there are plenty of things you cannot control, there are some steps you can take that put your finances on a more secure footing.


Build an Emergency Fund

Aim to save a little money out of each paycheck and put it into a savings account. Even a small amount will add up over time. The goal is to have enough money in there to cover an emergency car repair or medical expense so that you can handle life’s little emergencies without going into debt. Longer-term, aim to save six months' worth of living expenses.

Invest in Your Education

Money spent on education is not wasted. Taking out a student loan allows you to further your education and get a career that is rewarding, both mentally and financially. Interest rates on these loans are low, and repayment plans are flexible. While some people worry about taking on debt, student loans are an investment in your future.

Understand the Pros and Cons of Homeownership

In the past, homeownership was seen as an important step in the road to adulthood. While this is still the dream for many people, it is not for everyone and that is okay. If you would like to own a home, there are several things you should do to prepare. You should, of course, be saving for a down payment. Also, make sure you keep your debt to income ratio low and your credit in good shape. This ensures that you will qualify for the best mortgage rate possible when you are ready to take the plunge.

If you are more interested in being a long-term renter, there are still steps to take. Have a separate savings account that provides a small nest egg. If you need to move to a new property, you will want quick access to money for a deposit and moving expenses. Park this money in high-yield savings account so you can get to it easily if needed. Keep your credit in good shape. This makes you an attractive renter, important in a hot market.

Start Saving Early for Retirement

You will probably have several jobs throughout your working career. Some may have traditional 401k retirement plans, others may offer a pension, and others may offer nothing at all. Regardless of what is provided by your employer, you should make contributions to your retirement throughout your working life. This will help ease the stress of your later years, both when you are working, and possibly feeling the need to boost retirement savings, and when you are retired.

Your first step should be to take advantage of any retirement plan your company offers. If they provide a match, aim to contribute the maximum amount that they will match. If your company does not offer retirement, open an individual retirement account and contribute to it each year. The earlier you start contributing to your retirement, the longer you have to take advantage of compound interest.

Penniless Parenting

Mommy, wife, writer, baker, chef, crafter, sewer, teacher, babysitter, cleaning lady, penny pincher, frugal gal

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