theSkimm’s Guide to Getting Financially Fit
The co-founders of the popular newsletter share personal finance tips.
Carly Zakin and Danielle Weisberg are the co-founders of the daily email newsletter theSkimm. They have partnered with Chase to help you get financially fit. Here, in their own words, are some of their tips.
Personal finance. Breatheeee. If your plan is to measure your credit card balance by your stress levels when you swipe your card, spoiler: that’s not a plan. It’s time to get financially fit.
UGH. DO I HAVE TO?
Yes. If you want to retire like a baller, there’s a lot you can do today to get there. Or, think: if you want to fit into those leather pants you bought a size too small, it might be wise to ditch the ice cream and get to the gym.
SNEAKERS ON. WHERE DO I START?
First you’ve gotta answer some key questions, like…
‘What’s my net worth?’… as in you’re not rolling in it. Yet. This number is your starting point. Get it by tallying up your assets (savings, car, retirement fund) and subtracting that from your debt (student loans, credit card statement).
‘How do I pay down my debt?’… as in that bottomless brunch is going to take some cardio to work off. First, track your spending to see what your habits are. Set a budget, cut down your expenses when you can and tackle your debt with the highest interest rates first. Psst… credit cards usually have higher interest rates than student loans.
‘What’s my credit score?’… as in the scale doesn’t lie. Credit bureaus give you a number based on things like paying off your credit card balance on time. Just like the SATs, the higher the score the better. Your credit score matters when you want to make big money moves like buy a house. It helps lenders get an idea of whether you’re someone who can stay away from the snack drawer and pay your bills on time. So having good ‘credit health’ is important.
GREAT. WHAT’S NEXT?
Time to break a sweat. If you want to get financially fit, there’s some light, medium, and heavy lifting you’ll need to do to get on track.
Create a budget… as in you have to balance the calories you eat with the calories you burn. Figure out what’s coming in and going out of your bank account every month and set a budget. Stay strong. PS: here’s a cheat sheet to get you started.
Start saving… as in you know why that number on the scale isn’t moving in the right direction. Time to ask yourself the tough questions. Like… how many dinners do you eat out a week? How many lattes do you get on the go? Are you going to the gourmet grocery when there’s a cheaper one a few blocks away? That was harsh. This will help.
Get your student loans on track… as in you want to slip on those leather pants today, but these things take time. If you’re itching to get those student loans off the books, first thing’s first: understand how much you owe. That includes the different kinds of repayment options you’re dealing with. Here’s what you need to know before you make room in that fancy new budget you just made.
Rent or buy a home… as in are you getting a gym membership, or splurging on your own treadmill and weights? Nothing says ‘adulting’ like buying a home. Depending on how much paper you’re bringing in and where you are in life, it might make more sense to start putting money towards home ownership vs.paying rent to a landlord. Know what’s up before you make that call.
Merging money with your partner… as in it’s good to have a running buddy. As long as you’re both going at the same pace. Moving in with bae means sharing financial responsibilities. Avoid a showdown over who should pay for cable. Figure out now if you’re the kind of duo that pools your income to pay for expenses, divides the expenses, or pays into everything equally. Namaste.
Retirement. If you like the idea of spending your golden years as the silver fox on the beach or spending each holiday at a different pied-à-terre, you gotta start saving. Depending on your job sitch, you might have a 401k, an IRA, a SEP IRA. etc. This is tax code speak for the money you’re saving for retirement.
WHAT ARE THE DO’S?
Do remember this is a marathon, not a sprint. Do contribute as much as you can to your retirement fund. Psst… try to save at least 15% of what you make. Do set up automatic contributions. If you’re adding cash money automatically from your paycheck, you won’t even have time to miss it. And bonus: lots of companies “match” (up to a certain percentage) what their employees put into their 401ks. Questions? Answers.
WHAT ARE THE DONT’S?
Don’t fall off the treadmill. Don’t borrow or withdraw from your retirement account if you can help it. A lot of times there are penalties for early withdrawals. Avoid this by setting up an emergency fund. Aka a little somethin’ on the side to have on hand if something unexpected comes up. Think: a health crisis, losing your job. Don’t forget to re-evaluate how much you’re saving every year, and contribute more if you can. PS: as always, best to consult with your tax professional, accountant, etc.
Adulting is hard. By laying the groundwork now, and doing a little bit every day, you’ll get financially fit.
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