Money Management Basics: Earn, Save, Borrow, Invest, Protect
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Managing your money can seem complicated, but by focusing on five key areas — earning, saving, borrowing, investing, and protecting — you can take control of your finances and set yourself up for long-term success. Begin by taking these action steps.
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Earn: Increase Your Income
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Your financial journey starts with earning money, and maximizing your earning potential is essential.
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- Negotiate your salary: Ask your employer for a raise when it’s deserved. Come prepared with evidence of your accomplishments.
- Develop new skills: Take courses or certifications to improve your expertise and increase your value in the job market.
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Get a side hustle: Supplement your primary income through freelance work, a part-time job, or a small business venture. Visit RamseySolutions.com for more.
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Save: Build Your Emergency Fund
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Establishing an emergency fund is critical to creating a successful money management plan. Having an emergency fund provides peace of mind and financial stability in case of unexpected expenses.
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Set a savings goal: Aim to save 3-6 months’ worth of living expenses in an easily accessible account.
- Automate your savings: Set up automatic transfers from your checking account to your savings account to ensure you consistently save.
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Cut unnecessary expenses: Review your monthly spending and identify areas where you can reduce costs, then redirect that money into savings. Visit OKMM.com for more information!
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Borrow: Use Credit Wisely |
Borrowing is sometimes necessary, but it’s important to manage debt responsibly. The key is to borrow only what you need and can afford to pay back, and to use credit as a tool, not a crutch.
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Review your credit report: Make sure your credit report is accurate and take steps to improve your credit score if needed.
- Pay down high-interest debt: Prioritize paying off credit cards or loans with high interest rates to save money in the long run.
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Borrow only for essentials: Avoid using credit to finance non-essential purchases. Instead, save up for discretionary expenses. Visit OKMM.com for more information!
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Investing is critical for growing wealth over time. While saving keeps money safe, investing is a key strategy for building long-term wealth and financial security.
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Start early: The sooner you begin investing, the more time your money has to grow through the power of compounding.
- Diversify your investments: To reduce risk, spread your money across different types of investments. Consider stocks, bonds, and real estate.
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Maximize retirement contributions: Take full advantage of retirement accounts like 401(k)s or IRAs, especially if your employer offers matching contributions. Visit Investopedia.com for more information!
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Protect: Safeguard Your Assets
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Finally, protecting your money and assets is a critical part of a strong financial strategy. Having the right insurance and safeguarding personal information can prevent major financial setbacks.
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- Review your insurance coverage: Make sure you have adequate health, auto, home, and life insurance to protect against major losses.
- Create a will and estate plan: Draft a will and make an estate plan to ensure that your assets are distributed according to your wishes.
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Monitor for fraud: Regularly check your financial accounts for any signs of fraud or identity theft, and consider using identity protection services. Visit AnnualCreditReport.com for more information!
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Establish a solid financial foundation by taking action in these five areas — earning, saving, borrowing, investing, and protecting. Stay proactive, make informed decisions and adjust your strategy as your circumstances change. Your financial future is in your hands — take these steps today for a more secure tomorrow.
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Check out November’s edition of Financial Friday, Oklahoma Money Matters' online personal finance question and answer forum. This month, we answered a question about overspending during the holiday season.
As always, if you have money-saving tips you'd like to share, email us at OklahomaMoneyMatters@ocap.org or visit Ask OKMM to submit a personal finance question for a future edition of Financial Friday
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Everyone has personal financial goals they want to reach; whether it’s saving for a car, paying next semester’s tuition or going on a great graduation trip. Join us, Tuesday, Dec. 17, at noon as we discuss how to make sure your goals are S.M.A.R.T.
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We offer webinars for educators, students and parents on budgeting, saving, credit, and more. If you want to schedule a webinar, complete our workshop form and we'll contact you to plan the details.
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