Fletcher alum Alice Finn explains how to widen your world and find peace of mind by mastering your finances
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Do you wish you were better at managing money but feel too overwhelmed to learn how? It’s easier than you might think. Whatever your life stage or bank account balance, here are eight best practices to put you on track for financial health and success.
Start now.
Lots of people think they’re too far behind or don’t have clear-enough life goals to begin paying attention to their finances. But it’s never the wrong time. Dive in and learn by doing.
Take inventory.
Don’t be scared to look at your bank accounts. It never hurts to get a handle on what you make, what you spend, what you have, and what you owe. If you don’t like where you are, you can always come up with a plan to change it.
Pay off high-interest debt first.
Get rid of credit card debt as quickly as possible. But hold off on extra payments on your mortgage, especially if you have locked in a low rate. Your funds could earn you more just sitting in a money market account now, and in the stock market in the long run.
Save for retirement.
If your employer offers a retirement contribution match, make sure you take advantage of that—it’s a 100% return on your contribution! Beyond that, max out contributions to your retirement plans, including to a Roth IRA if you are eligible.
Put your money to work.
Invest in stocks—not individually, but through index funds. You’ll be betting not on any one company to succeed, but on people in general to be innovative and productive, which earns returns in the long run.
Talk to your friends.
Don’t make investing a taboo subject. Learn from each other and gain self-confidence. But avoid too-risky trends like cryptocurrency—instead, have an investment approach that will stand the test of time, such as the one in my book Smart Women Love Money: 5 Simple, Life-Changing Rules of Investing.
Rebalance.
People’s lives change, and markets move. Make sure to review your finances and make any necessary adjustments at least once a year, ideally around November, when you’ll be thinking about year-end tax implications.
Aim for your dream life.
Investing and making money are often seen as somehow greedy. But it can give you the ability and the choice to travel, start a company, fund your children’s education, retire, spend time with family—and live the life of your dreams.
—As told to Monica Jimenez by Alice Finn, F86, founder and CEO of wealth management firm PowerHouse Assets LLC and Fletcher School board member.
