You don’t have any influence over what the stock market does today, nor past decisions they may have got you in debt.
But there’s a lot you can control.
As such, when it comes to money moves, your focus should be on:
- Things that make a difference in your life
- Things you can actually control
With that in mind, here’s 6 smart money moves you can make today that will make a big difference in your life.
# 1 – Get Out Of High Interest Debt ASAP
It’s hard to get ahead when you’re constantly treading water trying to stay on top of high interest debt.
It’s fine to use credit cards to build up your credit score, but you want to make sure you pay them off at the end of each month so you avoid interest.
For those with high-interest debt, here are steps you can take right now to help you get out of debt faster:
- First things first, cut up your credit cards. Use a debit card or cash until your high-interest debt is paid off.
- Find out exactly how much debt you have. A smart debt payoff plan must start with accurate information. You’ll need to look at all your debts and their interest rates to come up with the best strategy for paying them off. A fast and free way to do this is to get a “credit report card” from Credit Sesame. Your “credit report card” will tell you exactly how much money you owe and to whom, your monthly payments and interest rate.
- Slash your interest rates. If you’ve been making payments on time, try calling your credit card company to negotiate your rate. If they say no, check out these balance transfer credit cards to find one with a zero or low introductory rate. Transferring your balance to such a card can save you hundreds in interest overtime.
Related Reading on The Ways to Wealth
- An 18-Minute Plan To Start Paying Off Your Debt
- 27 Creative & Smart Ways To Pay Down Debt Faster
- The Debt Snowball Method Explained: A Quick-Start Guide
# 2 – Learn to Focus
What’s rare in today’s economy? Focus. Specifically, the ability to focus without distraction on a demanding task.
With the distraction we face on a daily basis, from emails and texts to meetings, it’s hard to find a few hours to focus on work that matters.
While it’s hard, it’s worthwhile. Because wealth builders are producers, not consumers.
From the excellent book, Deep Work by Cal Newport:
The ability to concentrate without distraction on a demanding task (what I call “deep work”) is becoming more rare at the same time that it’s becoming more valuable in the knowledge sector. As a result, those individuals and organizations who put in the hard work to cultivate this skill will thrive.
The success in your career is the fuel for your financial life. It’s then the ability to focus, which allows you to produce at a high level in your career.
# 3 – Start a Side Hustle
You never know where a side hustle can take you.
This blog for example started as a side hustle. I worked on it an hour or two each morning before my full-time job. In a little over a year, I was earning enough that I decided to leave my full-time job.
The Internet has made it incredibly easy to start a business. For example, the startup costs of launching a blog are under $4 a month. It also takes just 15 minutes to get started (see The Ways to Wealth’s blog setup tutorial).
While this blog is doing well, some millennials like Michelle Schroeder-Gardner of the personal finance blog Making Sense of Cents are killing it. It was actually her course, Making Sense of Affiliate Marketing that was the catalyst for allowing me to go full-time with this blog.
Interested in starting a blog? I have a free 7-day email course: How To Make Your First $1K Blogging.
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# 4 – Save Thousands on Student Loan Payments
If you have student loans, there’s an opportunity you won’t want to miss.
That opportunity is refinancing and/or consolidating your student loans to a lower interest payment. This one simple act can save you thousands of dollars.
What exactly is refinancing?
When you refinance you’re taking your existing student loan(s) and rolling them over into a new, single loan. The goal is to obtain a lower interest rate then what you’re currently paying. This lower rate saves you money by either shortening the amount of time it takes to payoff the loan and/or lowering your monthly payment.
The easiest way to see if you can save money by refinancing is to check out LendKey.
With LendKey you get to see personalized loan offers from multiple, vetted lenders in minutes. What’s impressive is that the average savings of one of their customers who refinance their student loans is over $16,000!
Seeing your offers on LendKey won’t affect your credit score either. There’s also no service fees, no prepayment fees, and no origination fees.
# 5 – Optimize Your 401(k)
For building wealth, you can’t beat a 401(k). The forced savings aspect, combined with the guaranteed return of a company match can grow your net worth fast.
Unfortunately, many millennials are making some serious mistakes with their 401(k)s:
- The first mistake is not contributing at all. If you have existing high-interest debt, that can certainly be a smart move. However, once your high-interest debt is gone, you want to start contributing as soon as possible. (The big exception to this rule is if your 401(k) doesn’t match contributions and has poor investment choices. In that case, consider investing in an IRA).
- The second mistake is not taking advantage of the 401(k) match. A 401(k) match is equivalent to a guaranteed return, sometimes up to 50%. There’s no other investment that can offer that.
- The third mistake is not investing appropriately. One tip is to put 100% of your allocation towards a target retirement fund. While it may not be perfect, it’s better then most.
Don’t be afraid to start small. Even if you can contribute just 1% right now, that’s better than 0%. In three months, increase your contribution by another 1%.
If you were to increase your contribution by 1% every three months, in five years you’ll be saving 20% of your income.
# 6 – Investing in Themselves
No one is born understanding complicated financial matters. The key to understand how to improve your finances, or anything for that matter, is by educating yourself.
Before your eyes start to glaze over and a little bit of drool begins to accumulate at the corner of your mouth, you should understand that finances don’t have to be boring. Remember, with every little detail you learn, you’ll make yourself richer. And that’s something to get excited about!
Head to your local library and grab some books and magazines to get you started. Log on to your computer and visit the wide variety of financial blogs online.
Related Reading on The Ways to Wealth
- How To Invest In Yourself: 25 Mostly Free Ways To Upgrade Your Life
- 20 High-Paying Part-Time Weekend Jobs For Extra Income
- 7 Ways to Get Paid to Watch Videos Online
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