7 Smart Money Moves for Any Age

When it comes to money, making more of it does not necessarily mean you have more to spend. Even people bringing in six or seven-figure incomes can run into financial problems if they don’t have basic budgeting management skills in place. The way you spend and save money on an everyday basis impacts your overall financial health, both in the short- and long-term.

Not sure where to begin? Take a look at seven ways to get your finances in better shape.

1.    Pay Off High-Interest Items

If you have high-interest credit card debt, now is the time to pay it off (and not rack any more up). In late 2015, the Federal Reserve announced the first rate hike in over a decade. Several more are expected over the next few years and this interest could add up quickly, depending on your balance.

This also applies to other unsecured debt like student loans. It’s important to make paying this borrowed money back a priority so that you don’t end up paying high amounts of interest along the way.

2.    Create an Emergency Fund

If an unexpected expense of $500 popped up, could you pay it? What about $1,000, or even more? What if you or your spouse lost a job? The truth is, nearly everyone experiences an expense that they have not planned for, and seeking out high-interest, short-term loans or putting that cost on a credit card (see the first point) can be incredibly expensive.

Financial experts say that people should have two months’ worth of salary saved in the event of a lost job or another emergency. That may seem cost-prohibitive, but remember that you don’t have to do it overnight. If you set aside just $50 per month, you’d have $600 in a year. If you didn’t need to use that emergency money, it would continue to grow over time. Consider creating a modest emergency fund to tide you over in tough times.

3.    Budget & Track Expenses

There are several free and easy online apps that can help you better budget your personal finances and keep track of how you are spending your money. If you aren’t into all that technical stuff, just create a simple spreadsheet file on your computer, or keep a handwritten ledger.

Categorize where you are spending money, from necessities like your mortgage and electric bill to luxuries like going out to eat or taking vacations. Make space in your budget for retirement and emergency savings. Once a month, take stock of how well you are adhering to your budget and in what areas you should really be spending less.

From there, try to spend less on trivial things and invest more in important things like your home value or your savings. Tools like PerosnalCapital, mint, Yodlee, etc keep track of all your expense in one report. These are free to use tools.

4.    Adjust Your Investments

The way you invest your money changes based on your age and life circumstances. The younger you are, the greater risks you can take with retirement savings. As you get closer to that retirement age, you will want a more conservative investment approach. Talk with a financial advisor about the best places to put your money based on your age, portfolio, and the market.

5.    Save for Retirement

A recent survey from America Saves Week found that just 52% of Americans believe they are saving enough for retirement – and that number is a 3% drop from the year before. This means nearly half of all Americans will not have the means to get by during their senior years.

If you set aside little bits of money as you go (and don’t touch it), you should have more than enough when you’re ready to retire. Even if you are in your 40s or 50s, there is still time to put money away to help guide you through the fixed-income years.

If you aren’t saving for retirement at all, find a way to set even a small amount aside for the future. If your employer offers a retirement savings plan, take advantage of it and have that money taken out before you even get a chance to see it. If your employer matches those contributions, even better.

If you are self-employed or don’t have an employer-provided program, talk with a financial advisor about a monthly automatic debit from your checking account into a mutual fund or 401k.

6.    Get Creative with Your Income

The American workplace is transitioning to more remote opportunities. This means that there is a lot of work that can be done from home – particularly when it comes to contract or part-time positions. If you are retired, or want to be semi-retired, it’s ideal to find one of these remote/virtual positions. There are many websites that connect companies with qualified contract and part-time workers in all sorts of industries.

You could also launch an online store if you’re crafty. Start writing a blog or create a website and earn some extra money by selling items or ads. Even if you have a full-time job and want to supplement your income, look for simple ways to bring in more cash without leaving the comfort of your living room.

7.    Know Your Assets

As we move through life, our assets rise. One of the most valuable items most people own is their home. If you haven’t had your mortgage refinanced lately, or your home is completely paid off, it may be time to revisit the worth of your home and identify how it can boost your current financial situation.

Refinancing, or taking out a second mortgage, could mean extra cash to handle other expenses or even improve the resale of your home. For senior citizens, a reverse mortgage may be a smart move to give that fixed-income a lift and make life in those golden years even more comfortable.

When it comes to money matters, you don’t need a ton in order to make it grow and last. Smart everyday moves will add up over time and end up improving your financial outlook for life.

About the author:  Mehran Aram, a graduate from the University of San Diego School of Business in 1984, founded Aramco Mortgage in 1998 after spending almost five years in the industry. Today, Mehran Aram is President and CEO of The Aramco Group, and has recently been honored with the distinction of CRMP(Certified Reverse Mortgage Professional) a certification held by less than 50 brokers nationwide. Mr. Aram currently heralds the title of “Mortgage Analyst” on San Diego radio stations: AM 600 KOGO, AM 760 KFMB, AM 1170 KCBQ, AM 1210 KPRZ, FM 98.1, and Fox News Monterey’s AM 1460.