The Path to Financial Freedom: Start Small to Save Big

We’re all familiar with the precautionary adage, “It’s not what you make. It’s what you spend.” You can probably also recount the various tales of great fortunes earned, only to be lost.

Why do so many people who accumulate wealth or fall into high-income brackets still face financial uncertainty?

The answer is simple: Lack of financial management and an inability to control spending – a common thread amongst all those seeking financial security.

I admit, I experience feelings of anxiety and mild palpitations when I see my Mint.com monthly financial summary waiting in my inbox, but I still do the unthinkable – I face my fear.

Taking control of your finances means getting a clear picture of your financial situation, setting goals, and creating a plan of action.

Get Your Complete Financial Picture

Do this today: Sign up for a free Mint.com account.

Sure, this is the MintLife blog and we are part of Mint (obv), but with over 10 million users and counting… Mint works. Period.

Mint.com allows you to securely aggregate all of your financial data onto one platform, create budgets, receive bill payment reminders, view charts that give you a snapshot of where your money is going, get money saving tips, recommendations, advice, and more.

All in all, it gives you a clear picture of your spending behavior. And once you identify spending patterns and learn to control this behavior, you’ll begin to gain control of your finances. 

Set Goals 

If you were taking a road trip across country, you wouldn’t leave home without first making sure you have every essential item you’ll need to reach your final destination.

The same is true with money: To reach your desired financial destination, you have to set goals.

Mint.com’s free financial tools, including an award-winning app, allow you to assess your current financial situation, set attainable goals, and monitor your progress along the way. It’s like having a money manager at your fingertips – without the fees.

If you aren’t sure where to start, Mint will create suggestions for you based off your financial picture. Maybe you aren’t saving enough for retirement or you have overlooked certain tax-advantaged accounts at your disposal — Mint will help you create a goal, set a plan, and monitor your progress.

To help you get started on your journey to financial freedom, any goal set during January 2013 in your Mint.com account enters you into the Money Boo Boos Sweepstakes with $500 weekly prizes.

Make 2013 the year you finally set your financial goals and take charge of your future.

Enroll in Direct Deposit

If your employer offers direct deposit, enroll. Direct Deposit makes funds available in your account immediately and helps you pay bills on time as well as avoid overdraft fees.

Also, some banks offer incentives for signing up for direct deposit, like cash bonuses.

Add Overdraft Protection

Add Overdraft Protection to your checking account to avoid costly overdraft fees. Most banks charge a $35 non-sufficient funds (NSF) fee, or more if you habitually overdraw.

Contact your bank and inquire about overdraft protection options, which usually take form in a savings account or line of credit linked to your checking account.

Keep a small amount in your overdraft account or request a low credit limit. Don’t get caught up in the vicious cycle of overdrawing and depleting savings or racking up debt.

Overdraft protection is a safety net and should only be used as a precaution.

Automate Bill Pay

Set-up automated bill payments and avoid unnecessary late fees. Creditors generally allow a grace period following due dates, but this isn’t always the case.

These fees might appear nominal or irrelevant, but they can quickly add up and be damaging to your credit scores.

With automated bill pay, you are able to create payee profiles and schedule reoccurring payments.

This is a great way to avoid late payments and incurring associated fees, as well as preserve your credit.

Analyze Bank Statements, Financial Statements and Bills

Develop a habit of viewing and analyzing your bank statements, financial statements and monthly bills. It’s crucial that you’re aware of every transaction occurring on your accounts.

Erroneous fees and unauthorized charges manage to slip past consumers who are not in the habit of reviewing their monthly financial statements and bills.

Schedule a standing appointment with yourself to review your statements and bills. Go back one or two months and note any unauthorized charges. Most banks and other service providers are happy to reverse charges incurred within 60 – 90 days.

If something arouses suspicion, question it! As a valued customer, businesses will work to remove the charge or extend a courtesy credit.

The Bottom Line

Patiently follow through with your goals and gradually adjust your habits until you resist the urge to overspend.

Take advantage of free money management tools, automate your deposits and bills, and stop letting small charges and fees go unnoticed.

These basic principles are the cornerstone to gaining control of your finances.

Qiana Chavaia is the CEO and Founder of Q Arts & Media, LLC, a New York City-based marketing firm. She’s also a digital and interactive marketing strategist, and small business and personal finance columnist for Mint and Quicken.