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Apr 10, 2019

10 Steps to Transform Your Financial Life

By Stacy Paradise

Photo credit: Getty Images
  1. Know Your MoneyMind®
    We each have a “money story” based on our core values. It’s important that you investigate your money story and challenge any negative beliefs you find. Next, you need to practice your new money mindset by surrounding yourself with positive influences. Books, podcasts, videos, people—anything that supports positive thinking!To help people better understand their biases about money, United Capital has developed the fun MoneyMind® tool. Click here to take the simple quiz and learn more about your MoneyMind®.
  2. Create a Budget
    It is crucial to know what your cash flow looks like, and that means making a budget. Try to have a positive outlook while following this step—everyone is different, so find a method that works well for you. Ask your financial planner for suggestions on what tools they think would work best. 
  3. Track Your Spending
    Your budget spreadsheet should have all of your expenses already listed. Be sure to include line items for variable expenses such as gas, groceries, entertainment, personal expenses, children, pets, and charities. Track your spending over the next 30 days, then record the amount you spent in the proper category. This will help you be aware of where your money is going.
  4. Stop the Leaks
    Assess your spending habits. You don’t need to change your spending habits if you’re comfortable with where your money goes, but think about ways you could improve the outflow of your money. For example, you could cancel a subscription you don’t need or negotiate a lower bill for cell phone and television services.
  5. Create a Savings Plan to Support Your Goals
    How much should you allocate towards savings? The answer depends on a multitude of factors. Luckily, there are Wealth Advisers who can help you create a plan based on your specific needs and desires. Until you make the time to meet with a licensed advisor, you may wish to put 5% toward your emergency savings, 5% toward your dream savings, and 10% toward your retirement savings, at a minimum.
  6. Increase Your Credit Score
    First, get a free credit report and review it for accuracy. Ensure that you make all your payments on time and pay down your credit card balances until they reflect less than 30% of the available credit. Close credit accounts that you don’t need, but try to keep the oldest credit account open—credit bureaus like to see a long credit history. Too much available credit can lower the amount a lender will approve when you need a loan.
  7. Tackle Your Debt
    Take an honest assessment of where you stand by listing all your debt—include details like the interest rate, minimum payment, and balance owed. Call each creditor and ask them to lower the interest rate. Ask what balance transfer offers are available—consider transferring debt from credit cards with high interest rates to a card with a lower rate. You may also consider a consolidation loan. Ask your financial advisor what debt repayment method they recommend you use.
  8. Automate Everything
    The IRS knows that the best way to get paid is to take money out of your check before you receive it—why don’t you do the same? Set up direct deposit and automatic payments for as many bills as possible. Pay yourself first by setting up automatic payments into your retirement plan and savings accounts.
  9. Increase Your Income
    There are millions of ways to make more money. Meet with your advisor and tax consultant to discuss your options; you could use your talents to help other people and get paid in the process, create multiple streams of income with investments, purchase a vacation property to rent out, or consider keeping your old home as a rental property the next time you move.
  10. Gather Your Team
    Everyone should have a financial advisor, tax advisor, attorney, and insurance agent on their team, or at least make sure they are accessible to you as a resource. Build relationships with your advisors—they are more likely to take great care of someone they know and like.

After reading all these steps, the most important thing for you to do is to take action and implement your strategies. Dedicate time each week to focus on an action step. Overcome any fears you might have about your finances. Create a good relationship with your money and transform your financial life!

Money Mind® is a registered trademark of United Capital Financial Advisers, LLC. All rights reserved.

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