Finances can be a sticky topic for people of any age.
However, they are something that’s inescapable as, without them, you often can’t live a comfortable life. While some have managed to develop healthy finances over the years, others lag behind. No matter what position you happen to be in, it’s important to note that it’s never too late to work on improving your finances. There is always an opportunity to set new goals and work towards achieving them. Below are a couple of ways that you can grow healthy finances as you age.
Have clear cut goals
Setting financial goals can help you achieve greater success when it comes to your finances. Before you set any goals, you have to know where you stand and what the honest state of your finances are. Once you know that, you can move on to evaluating your income and expenses. The last step is to envision where you want to be and set goals that will make it happen.
You should also note that you can change your goals or create new ones at any time. You don’t have to have the same goal for twenty years, so be flexible if you need to be.
Keep your credit score high
One indicator of healthy finances is a good credit score. While a fair credit score is seen as anything between 721 and 880, a good one is seen as a score anywhere between 881 and 960. If you don’t know what your score is, you can get your credit score for free from a number of sources. One way to get it would be by checking a credit card or loan statement from an existing creditor. You may also find that your credit card provider offers this service for free. Once you’ve checked your credit score, you have the responsibility of keeping your score high. Here a couple of ways that you can do this.
Keep your credit card balances low: People often get credit cards as a way of building and maintaining good credit. However, if you don’t want it to negatively impact your score, keep your balances as low as possible so you don’t take on too much debt. It is advised that you keep your expenses below 30% of your total credit line. Also, avoid putting in too many applications for new credit as it could look suspect to lenders.
Manage your debt: Having debt isn’t a bad thing until you have growing interest rates and it spirals out of control. Don’t spend more than you can pay back and always have a repayment plan that will keep your credit in good standing.
Avoid late payments: It doesn’t take many late payments to affect your credit score. There are so many ways to prevent this from happening and one is to track your expenses. This way, you have enough to pay your bills and don’t end up defaulting on payments. Also, use apps as well as automation to ensure forgetting isn’t a reason for paying late.
Diversify your investment portfolio
You should have an investment portfolio unless you plan on simply sticking to work pensions when you retire. However, if you want to get the most out of your retirement pot, it’s always a good idea to diversify your income. Doing so will give you a better chance at increasing your pot and having more to live on during your retirement age.
To diversify your portfolio, you should have a mix of equities, government and corporate bonds, property and cash too. To help you spread risk, make sure you’ve got a range of asset types. In addition to diversifying asset types, you should invest in different sectors so you’re protected when there are dips in certain industries.
Get an advisor
Sometimes a financial advisor can help you get to your goal much quicker. Before making any serious financial moves that you’re unsure of, seek professional advice first. Doing so could prevent you from making costly mistakes. Make sure any financial advisor that you use is certified and experienced.
Having said that, not everyone needs a financial advisor so be sure it’s something you need before going ahead to spend money on one.
Once you stop working, you’re going to have to learn to live within your means. So that it isn’t a difficult transition, learn to begin living frugally now. Start by getting rid of items that you don’t use as a means of decluttering. Also, identify any triggers for impulse spending if that’s something you struggle with. Mastering delayed gratification could help you control your spending and be content with what you have too.