Looking to get your money into shape? Here are three ways to become financially fit in 2014.
Get the most out of your 401(k). While it is great to participate in your company’s 401(k) plan, be careful when selecting investments. If you simply hate risk or have a fear of losing money, you may never get the most out of your 401(k).
Be mindful that your investment funds need to keep up with rising costs. Therefore, simply putting money into short-term investments such as money market accounts will not help you reach long-term financial goals. Select an asset allocation that best fits your needs.
Pay yourself $10 a week … at least. If you are living on a fixed income and have struggled to build up an emergency fund, pay yourself $10 a week for a year. This will give you a little more than $500 at the end of the year.
After you have reached that goal, double up in the following year to really build your rainy day fund.
Adjust your expenses. Sometimes we find ourselves with a high overhead and simply think it will always be this way. However, I challenge you to do something about it.
Take a long look at your housing payments, automobile loans and other overhead costs. Then, determine how to cut expenses. This may mean selling your home with its expensive mortgage costs and buying something that is more affordable. Or, it may mean trading in your car for a lower monthly auto loan payment.
Simply put, cut expenses you do not need.
Kemberley Washington is a certified public accountant and a professor at Dillard University in New Orleans. She writes a personal finance blog at Kemberley.com. Follow her on Twitter or connect with her Facebook.