Financial Planning for Success in Three Steps
Financial planing is something that we care about here at Mint. Learn more with great financial planning tips in our blog article index.
Last week, we published Aaron Patzer’s Three Principles of Personal Finance in a three-part series. The full article is now available on the Mint Content Network, which you can read here.
We welcome your comments. And if you found the article useful, we hope you’ll forward, Digg, or share the article so others get the message: it can be simple to manage your money well and financial planning.
- Spend less than you earn.
- Make your money work for you.
- Prepare for the unexpected.
Now, we’ve reduced personal finance to three simple principles, and no more than a dozen action items. Can’t be any simpler, right? Wrong! We’ve built mint.com to be a great place to put these principles to work - today! Are you surprised? For example:
1. Use Mint for tracking finances…and see where your money goes
The first step to financial success is to know where you stand. You need a complete picture of how much you have, how much you owe, and where it’s all going. With financial planner software like Mint, you get all of that - for free, and with less than five minutes of setup.
2. Pay off your credit cards (highest rate first)
We’ve already shown you that a $5,000 credit card bill paid off at $100 a month will take nine years and $5,100 in additional interest charges. If you’re paying 20% interest on credit card debt, action item number one is to pay it off before you do anything else. There’s no point investing your money at a 10-15% gain, when it could be used to avoid a 20% loss.
3. Setup automatic investments
The key to wealth is compound interest. Invest just $200 every month when you’re 25 and at a 10% return, you’ll have $1.2m by 65. You’ll also have savings in case of emergency, money for your children’s college, and the ability to borrow from your investments for a down-payment on a house.
Not sure you can find $200 a month? Mint shows the average user over $1,800 in annual savings - that’s $150 a month right there. You’ll be well on your way.
Excellent tips! If I had to tell anyone the top three “basics” these would be it as well and these are exctly how I dug myself out a few years back!
I am always amazed at how many people don’t follow these tips.
I know one guy who sinks a lot of money into the Rich Dad, Poor Dad product line and wonders why he never has money. I tried telling him he would have been better off simply putting his money into an a savings account, but he wants to get rich quickly, not start small and start building a snowball that will start rolling downhill by itself once it has enough funding.
I would love to use Mint to manage my finances, unfortunately right now two of my main accounts aren’t support - 1st Financial Bank USA and Citizens Bank. Both are supported by Mint, but haven’t worked for weeks.
Also, I wish that you guys supported mortgages, student loans, auto loans, and personal equity loans.