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4 easy financial adjustments that pay dividends for years

What we'll cover

  • Tracking expenses and starting a budget

  • The importance of paying down debt

  • How to incrementally increase your retirement savings

Managing your money can sometimes feel like a full-time job.


It’s an important job but one that pays absolutely nothing – so it’s understandable if you don’t feel like taking care of your finances all the time.


Sadly, while unpaid, it’s necessary. But there are a few adjustments you can do right now that can improve your finances without costing you a ton of time.

1. Simplify your finances

When I started working and making my own money, I opened a lot of financial accounts and downloaded a lot of apps. I didn’t know what I needed and since the apps were free and the accounts had no minimums, there was no harm in doing so.


But over the years, all these apps and accounts added an unnecessary complexity to my financial life. I’d get Form 1099-INT from bank accounts I almost never used. I’d get reminders from apps to pay more attention to them.


I make it a point to remove something from my financial system whenever I find myself with some free time. It’s like decluttering my financial life.

2. Start tracking your spending

If you already maintain a budget, that’s fantastic. You can skip this one.


If you don’t budget, but also don’t want to, let me try to convince you to at least start tracking your spending. You need to know where your money is going so that you can understand whether you’re making the right decisions.


There are plenty of budgeting tools that can make this as painless as possible.


It’s great if you can take tracking your expenses to the next level by starting a budget, but you don’t have to. Just tracking it will be valuable, and when you do decide you want to budget, you’ll be thankful you have all this data.


Read more: What’s your budgeting style? Take our quiz.

3. Pay more than the minimum on debt

Debt, especially high interest credit card debt, is like stealing from your future self.


If you have a $10,000 balance on a credit card with an 18.9% interest rate, making just the minimum payments of $400 will have you paid off in “just” 14 years and, at that point, you’d pay a total of over $16,000. That’s an extra $6,000 on that debt.


Pay down that debt . The easiest way is to start paying more than the minimum each month. If you started a budget, you can see how much extra you have each month and consider putting part of it toward your debts.


The sooner you can rid yourself of that weight, the better off you’ll be.

4. Increase your retirement contributions

One day, you will want to retire. To do that, you’ll need retirement savings.


Saving for retirement is crucial but 25% of all non-retired adults have no retirement savings, according to the  2021 Report on the Economic Well-Being of U.S. Households  (this is an improvement on 2015 when the percentage was closer to 30%!)


Do not become a retirement statistic!


Try to increase your saving by 10%. If you contribute $100 per pay period, try to contribute $110. It shouldn’t wreck your budget, but it can make a big difference in your retirement.


If you contribute $100 each month into an account that earns 8% a year, after 40 years you’ll have $349,100.


If you contribute $110 each month into an account that earns 8% a year, after 40 years you’ll have $384,010. By kicking in an extra $10 a month, which amounts to $4800 over 40 years, you will come out ahead by over $30,000.


Will you miss $10 a month? Probably not.


Will you enjoy what amounts to an extra car in your retirement account? Most certainly.


Your future self will thank you!

Jim Wang is the founder of personal finance blog  Wallet Hacks . He uses his engineering background to demystify complicated financial topics to help you achieve your goals. Jim has been featured in The New York Times, The Baltimore Sun, Entrepreneur magazine, and more. He lives in Maryland with his lovely wife and three children.

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Image of Jim Wang, founder of Wallet Hacks

Jim Wang
Founder of Wallet Hacks

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