If you’re ready to start investing or ramp up your current investment initiatives but there just doesn’t seem to be enough money left over at the end of the month, don’t give up. The following strategies could help you manage your money better and free up resources for your investment goals.

  • Start budgeting. While most of us know what a budget is, how many of us actually use one? A budget can help you chart your cash flow by recording all of your sources of income and your fixed and variable monthly expenses. Once you determine where your money is going using a budget, you can prioritize your needs and potentially identify expenses that could be eliminated.
  • Cut down on credit card expenses. Avoid using credit cards whenever possible, but if you can’t, at least work to pay off your debt. Consider transferring your balances to a card with a lower-interest rate, and try to pay at least twice the minimum monthly payment.
  • Watch transportation costs. Do you really need a brand new car right now? You could save thousands by purchasing one that’s just a year or two old and yet still has a warranty. If you purchase a car — new or used — carefully consider whether to finance or lease it. The decision could dramatically affect your monthly expenses.
  • Put your extra cash to work. Did this year’s tax refund, raise, or bonus burn a hole in your pocket? The next one doesn’t have to. Make plans now to invest it.
  • Cut down on “luxury” spending. If you only go snow boarding or skiing twice a year, it might make more sense to rent equipment instead of buying the latest model and watching it collect dust the rest of the year. Renting movies instead of paying $8 or more to see the latest release and bringing lunch to work are other ways you can watch your bottom line without cramping your own style.

It may be difficult at first, but once you start you’ll see that a little bit of discipline can make a big difference when it comes to finding the money to pursue your financial objectives.

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Source/Disclaimer:

1Withdrawals from annuities before age 59½ are taxed as ordinary income and may be subject to a 10% federal penalty tax. In addition, the issuing insurance company may also have its own set of surrender charges for withdrawals taken during the initial years of the contract.

Asset allocation does not ensure a profit or protect against a loss. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

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