GOALS AND BUDGETING
GOLAS AND BUDGETING
Need a little help getting your financial house in order? You're in the right place.
Setting up a budget and keeping your financial records up to date may be on your to-do list—but when is the right time to tackle these tasks? There's no time like the present to start taking charge of your financial life.
Why is it important to get started? Because if you spend a little time getting organized now, you'll save yourself a lot of time later. And you'll be that much closer to achieving your financial goals.
Organize Your Financial Life
Prepare now to make life easier down the road.
Managing your finances can feel like putting together a complicated puzzle, but it's easier than you think. Just take the time to set up the right tools and get organized, and the pieces will start falling into place.
Open the right accounts.
Banks offer many incentives to open an account, such as reward points, cash back, and free checks. However, an account that offers reward points may also charge fees. And an account that offers free checking may limit the number of checks you can write each month. Take the time to comparison shop to find the features that are important to you.
A checking account with ATM access is pretty much a necessity, and so is a savings account. Consider linking these two accounts so that you can automatically put a certain amount in savings each month. You'll be amazed at how quickly it will add up.
Be sure to shop around for checking and savings accounts before you decide where to put your money.
What to look for:
A checking account that pays interest
No or low minimum balance requirements
Unlimited free checking
Free ATM withdrawals
Online and mobile services, such as free bill pay and remote deposits
What to avoid:
Fees for insufficient funds
Limits on checks, deposits, or ATM withdrawals—and fees if you exceed the limits
Why pay bank fees if you don't have to? Bankrate.com has an easy account comparison tool to help you find the best deal for your situation.
Set up a filing system.
Financial details and paperwork will make more sense to you if you know where everything goes. That means creating a system that works now, so you don't have to think about it later.
Whether you keep paper files or save electronic documents, organizing them by the categories below will help you keep them all straight. Some might not apply to you yet, but you may want to plan ahead.
Checking account statements
Savings account statements
Credit card statements
Car loan statements and paperwork
College loan statements and communications
Personal loan statements
Lease (if you rent)
Security deposit receipt
Rent payment receipts or canceled checks
Title or deed to your home (if you own)
Final settlement statement (needed when you sell)
Mortgage payment receipts
Home improvement receipts
Brokerage account statements (i.e., 401(k), IRA)
Annual Social Security statements
Current year's tax return
Tax returns from the past seven years, along with backup receipts for at least the last three years (longer if there are any unusual circumstances)
Taxable brokerage accounts (keep annual statements and trade confirmations)
Statements for your children's accounts
Set goals and start tracking your progress toward them.
What do you want from your money—a down payment on a house, a new car, or a comfortable retirement? Take time to think about what's most important to you and what you want your money to achieve.
Once you've determined your goals, write them down. Think of them as a road map to where you want to go—and make them practical and attainable.
Here's a simple two-step approach:
Divide your goals into three categories: short term (less than one year), medium term (one to five years), and long term (more than five years).
Attach a dollar amount to each goal. For instance, a short-term goal might be a vacation. How much will it cost? The more specific you are about your goals, the more motivated you'll be to work toward them.
With your goals in front of you, you can and saving to meet them. Decide how much you can put toward each goal per month. Then use our to help you project how long it will take to reach each goal.
Be sure to track your progress regularly. It can be really gratifying to watch how savings can accumulate toward a goal.