Our mood-of-the-moment often sways the decisions we make.
When the time comes to decide whether to study or do something fun, or, eat vegetables or a delicious dessert, there is always one choice more appealing. In these times, it is easy to give in to the mood-of-the-moment. Later, we regret decisions or feel guilty for not making the better choice.
Instead of listening to the present self and the mood-of-the-moment, think of your past self, and your future self. Think of making the decision that your past self wanted, and the decision that your future self will thank you for.
These 5 financial decisions are ones that your future self will thank you for.
Have a Retirement Savings.
Why? How? And how much?
Remember this: The earlier you start, the better. Your money will grow over the years that you save, and because of compound interest, an earlier start can mean your money will grow faster. Ask this: Does your employer offer a 401(k) plan, and do they match funds? If so, enroll and contribute enough money to get the most of employer matching. If not, check out Etrade.com, where you can open a "Roth Individual Retirement Account (IRA)."
Save this: Aim to save at least 5 percent of your gross income, with a goal of eventually 15 to 20 percent.
Budget and live within your means.
Have more money coming in than going out, and you are good! I used to see budgeting as an unwanted restriction on my life. Now, I see it as a tool for financial freedom. It's all about balance. Start your budget!
Create a debt reduction plan.
If you have loads of debt piled up that you are deliberately avoiding because facing it will mean that you may suffer a mild heart attack, it's time to conquer it. I know that debt is scary and it's painful and it's another complication that you could do without. But, the sooner you face it, the sooner you can get it over with and move on with your life. A good plan of action is to look at the interest rates on your loans. If you have money saved up, try to pay off some of the higher-interest loans. You can pay more than what you owe every month, and get your debt down faster. Figure out how much you can dedicate every month to freeing yourself of debt.
Get an emergency fund.
Remember this: Use this account separately from your savings. This is for emergencies only! This way, a small accident doesn't send you spiraling into debt.
Save this: It doesn't have to be much. $300 or $500 can help with an unexpected emergency. Try saving $10 a month, if it fits in your budget.
Set a long term goal.
Think of your future. What do you really want? What would you like to be doing, or have done? Save up for this goal, and don't forget it as you move forward in your financial life. Having a long-term goal will help you to stay on track.