WELCOME to HumbleDollar’s new financial life planner, which is designed to complement the portfolio builder we unveiled earlier this year.
The life planner’s goal: Guide you through 13 financial steps that’ll help you navigate the journey from your 20s to your 60s and beyond. Below, you’ll find the first of the life planner’s 13 steps—plus links to the other 12.
Step No. 1: Prep for Success. All too many Americans lead shaky financial lives. They often overdraw their checking account. They carry credit card balances. They pay bills late. Even an unexpected $400 or $500 expense can leave them scrambling.
We should strive mightily to avoid this sort of financial life—because it’s a life overflowing with stress. How do we escape its clutches? We should cultivate three qualities.
First, we need to build some financial breathing room into our lives, by limiting our monthly fixed financial obligations. In particular, we should make sure our housing and car costs aren’t so large that we’re easily knocked off course by surprise expenses. That’ll also give us a decent shot at spending less than we earn, so we can save for the future. Make no mistake: Good savings habits are the greatest of the financial virtues and the key to amassing wealth.
Second, with discretionary spending like clothes, electronic gadgets and eating out, we need to resist impulse purchases—and instead pause long enough to consider whether these are good uses for our money and whether we can truly afford them. If we can’t resist impulse spending, we might use a debit card instead of a credit card, so the money comes straight out of our checking account. If that doesn’t work, we might default to always paying cash.
Finally, we need good financial habits. That includes not just saving regularly, but also paying bills on time and keeping a close eye on our checking account balance. This will allow us to avoid fees for late payments and bounced checks, and put us on track for a better credit score.
TWO WEEKS AGO, we started seeking donations to support HumbleDollar’s operations. Since then, 130 readers have answered the call, contributing enough to cover our costs for three months. Many, many thanks.
My hope is that HumbleDollar’s operations can be supported largely or entirely by donations—and that we can run less and less advertising over time. This week, as a first step in that direction, we removed half the advertisements from the homepage. If donations continue to roll in, we’ll eliminate further advertising.
Some readers got in touch, asking whether they could donate via PayPal. Your wish is our command: Check out HumbleDollar’s revamped donation page.
Follow Jonathan on Twitter @ClementsMoney and on Facebook. His most recent articles include Calling the Shots, Cover Me and Singled Out. Jonathan’s latest books: From Here to Financial Happiness and How to Think About Money.
HumbleDollar makes money in three ways: We accept donations, run advertisements served up by Google AdSense and participate in Amazon‘s Associates Program, an affiliate marketing program. If you click on this site’s Amazon links and purchase books or other merchandise, you don’t pay anything extra, but we make a little money.