Spending money can be a lot of fun, but that doesn’t mean it’s fun to deal with your finances. However, the latter can leave you with an empty bank account while the former has the potential to set you up for long-term financial success.
Even if it’s difficult and it’s not that much fun, these are five financial tasks that you should tackle sooner rather than later.
Planning Your Estate
Whether it’s because you feel like you’re too young or you don’t have enough high-value assets, many people make the mistake of thinking they don’t need an estate plan. Nothing could be further from the truth.
Estate planning includes many documents that young and old, as well as those who are wealthy and those who are not, should get sooner rather than later. Not only does estate planning divvy up your belongings after you pass away, it can also make life easier for you while you’re living. A thorough estate plan can help you plan out what to do if you should become sick or injured, it can help you make sure young children are cared for if something should happen to you, and it can make it easier for your loved ones to know what to do should the unthinkable happen.
Estate planning is made much easier when you get help from a professional. Reach out to a financial planner or an attorney to ensure no detail is overlooked.
Build Your Rainy Day Fund
Living paycheck to paycheck may technically mean you’re able to pay the bills, but it can leave you in big trouble if you are fired or you become injured and you’re unable to keep your job.
If you don’t have a savings account dedicated for emergencies, now is the time to get it started. If the task feels overwhelming, start by setting small goals, like saving $100 or $1,000. Eventually, it’s a good idea to have between 8 to 12 months’ worth of expenses saved. That way, if anything should ever happen, you have the funds you need to pay the bills. It can give you peace of mind, and it can even give you the push you need to quit your job and follow your dreams.
Work Irregular Expenses Into Your Budget
You probably already know the importance of creating a budget. The question is, how accurate is that budget?
It’s easy to overlook irregular expenses, but they should be worked into your budget the same way that regular, monthly expenses are accounted for. Just a few irregular expenses to start budgeting for include:
- Babysitters
- Haircuts
- Health expenses
- Home repairs
- Gifts for family and friends
- Vehicle registrations
This also includes big ticket items that have the potential to ruin your finances. If you know your car is on its last leg or your water heater is well past its prime, it’s a good idea to start saving before it has to be replaced.
Save For Retirement
Saving for retirement can be difficult. It can be very confusing, and it isn’t much fun. It can be hard to put money aside that you won’t use for decades when you could put that money to use right now.
It’s well-worth your time to figure out a strategy for saving for retirement, no matter what that is. Whether you’re maxing out your employer’s contribution, you’re opening your own IRA, or you want to consider more creative retirement strategies, like investing in artwork, it’s a good idea to start planning for your retirement as soon as you are able.
Pay Off Debt
Paying your bills as they arrive in the mail every month is important, but if some of those bills include interest, you may want to consider paying off your debts sooner.
There are a few different strategies for paying off debt. If you’re seeking immediate gratification, try paying off your smallest debts first. If saving as much money as possible is your goal, focus on paying off your highest interest debt first. Either way, you could end up saving hundreds or even thousands of dollars, and with a few less debt payments, you’ll have a little more money in your bank account each month too.
Don’t fool yourself into thinking you’ll get serious about your finances next month. Get serious about them now! Whether it’s an estate plan, saving for a future emergency, or making plans for your retirement, there are many money tasks you should tackle sooner rather than later.
