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6 Things You Must Do to Save Money in 2024 

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Financial well-being is more than just having enough money to pay the bills. It is also about feeling confident and secure about your future and having the freedom to make choices that allow you to enjoy your life. However, achieving it is difficult, especially amid uncertainty and stress. That is why conducting a regular financial checkup is essential, just like you would for your physical health. 

It helps you assess your current economic situation, identify any gaps or problems, and take steps to improve your financial health. If you are not sure how to go about it, we have six simple steps to keep everything in check.

1. Review your income and expenses

Understand where your money is coming from, where it is going, and whether you live within your means. You can use a budgeting tool, a spreadsheet, or a simple pen and paper. 

Compare your total income and expenses, and see if you have a surplus or a deficit at the end of the month. The optimum expense ratio can be identified using the 50/30/20 rule. It might sound complicated, but it’s quite simple in practice. First, you identify your income after deducting all the taxes. Now, you split this money into three chunks: 50%, 30%, and 20%. The 50% chunk is used for your basic needs like paying rent/EMI of the house, bills, groceries, etc. Now, coming to the following 30%, the expenses that don’t make sense economically, but for you, like buying a gaming console or an expensive vehicle or going out to restaurants, this 30% is for that. The remaining 20% is for savings and debt repayment. 

If you have a surplus, you can use it to save, invest, or pay off debt. If you have a deficit, you must find ways to increase your income, reduce your expenses, or do both.

2. Evaluate your savings and investments

This will help you determine if you are saving enough for your short-term and long-term goals and investing wisely and diversely. To do this, you can review your bank statements, investment accounts, retirement plans, etc. 

Calculate how much you have saved and invested; as discussed earlier, at least 20% of your income should be ideal. Some typical financial goals include building an emergency fund, saving for a home, a car, a vacation, a wedding, etc., and saving for retirement, education, or other long-term needs. Once you know the numbers, you can adjust your savings and investment strategies accordingly.

3. Check your credit score and report

Credit health is one of the most essential things in the 21st century, and keeping track of it keeps you safe from errors or fraud and improves your creditworthiness. To do this, you can request a free copy of your credit report from the major credit bureaus: Equifax, Experian, and TransUnion. 

You can also check your credit score for free through various online platforms; even some banks provide you with it. Review your credit report and score, and look for any inaccuracies, such as incorrect personal information, outdated accounts, or unauthorized inquiries. 

Improve your credit score by following some best practices, such as paying your bills on time, keeping your credit utilization low, avoiding new debt, and maintaining a good credit mix.

4. Assess your insurance coverage

Protect yourself and your loved ones from accidents, illnesses, natural disasters, or lawsuits. You can review your insurance policies, such as health, life, auto, home, renters, disability, etc. Check if your coverage is adequate, up-to-date, and, most importantly, affordable. 

Compare your coverage with your current and future needs, and see if you need to add, remove, or change any features or benefits. For example, you may need to increase your life insurance coverage if you have a new child or lower your auto insurance deductible if you have a higher income. 

You can also shop for better rates or discounts or bundle your policies with the same insurer to save money.

5. Set and track your financial goals

Stay motivated and focused on your financial well-being, and measure your progress and success. You can use the SMART framework, which stands for Specific, Measurable, Achievable, Relevant, and Time-bound. 

For each goal, you can define what you want to achieve, how much you need to save or invest, how you will do it, why it is essential, and when you want to accomplish it. 

6. Seek professional advice

Following the steps mentioned is not everyone’s cup of tea, and for such people, it’s best to seek professional advice from a qualified financial advisor. A financial advisor can offer you many benefits, such as providing expert financial advice, saving time and effort in managing your finances, avoiding common financial mistakes, accessing a broader range of investment opportunities, and achieving enhanced financial security. 

Before hiring a financial advisor, check their credentials, experience, fee structure, and reputation. Remember, a good financial advisor is a service provider and a trusted partner in your financial journey.

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A financial checkup is a valuable exercise that can help you improve your financial well-being. By reviewing your income and expenses, evaluating your savings and investments, checking your credit score and report, assessing your insurance coverage, and setting and tracking your financial goals, you can gain more control and confidence over your money and achieve your financial dreams. Remember, financial well-being is not a one-time event but a lifelong journey. The sooner you start, the better off you will be.

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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.

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