Avoid Bad Financial Luck This Friday the 13th With These 5 Tips
Opening an umbrella indoors might not bring you bad luck, but being unprepared in your finances could. This Friday the 13th, don’t knock on wood or avoid black cats when it comes to your financial matters. Instead, make sure you take steps to safeguard your financial situation—not just today, but every day.
These five tips can help you ward off bad luck when it comes to your finances:
1. Create a Budget (and Stick to It)
Having a budget or a spending plan can help you manage your expenses and is fundamental to your financial health. Start by writing down your monthly income, then track your expenses and see where you can cut back if needed. Be realistic, leaving yourself a little wiggle room for when costs are higher than expected, and make paying off high-interest debt a priority.
It often helps to set financial goals for yourself. This can help keep you motivated when you’re tempted to stray from your spending limits.
2. Establish an Emergency Fund
Regardless of the day, having an emergency fund is always a good idea. That way, if your income drops or unforeseen expenses arise, you’re prepared to weather the storm.
Recent data from FINRA’s 2024 National Financial Capability Study shows that nearly half of respondents don’t have an emergency fund. That lack of a financial cushion can make any stroke of bad luck even worse, especially if you must go without vital services such as health care, childcare or car repairs or need to take on debt to pay the bills.
Make sure that doesn't happen to you by building your emergency fund. Ideally, you want it to eventually equal about three to six months' worth of living expenses, but even a small emergency fund is better than nothing. Start by setting up a regular, automatic contribution of an amount you can reliably afford, and add extra when you can.
And if you’ve already set up an emergency fund, don’t let rising prices and expenses catch you off guard. Check periodically to ensure that these savings still cover three to six months of living expenses, and add funds as necessary.
3. Take Steps Toward Investing
Taking the first steps to begin investing can feel overwhelming, so start small. If your employer offers a retirement plan with matching contributions, for example, that can be a good place to start.
As you create an investment plan, establish clear goals, determine your risk tolerance and educate yourself about investment products. There are many free resources available to help you make informed decisions about investments. For example, FINRA's Fund Analyzer can help you analyze and compare the cost of owning mutual funds, exchange-traded funds and notes, and money market funds; FINRA’s Market Data Center has free data on equities and options, including price quotes, trading volume, and company profiles; and FINRA Fixed Income Data provides access to real-time data on bonds and other fixed income products.
4. Find a Qualified Investment Professional
Consider working with an investment professional to help evaluate which investment strategies and products might work best for you. Use FINRA's free BrokerCheck tool to research the background and experience of investment professionals and firms before working with them. Only FINRA-registered financial professionals can sell securities products such as stocks, bonds and mutual funds.
Interview a selection of candidates and be prepared to ask questions. For example, do they have experience working with investors with similar financial circumstances as yours? How are they compensated, and what fees and expenses should you expect to pay? If they promote a certification or professional designation, ask about its experience, prerequisite and training requirements. Be clear and honest about your investment goals and the amount of risk you’re comfortable taking.
5. Brush Up on Red Flags of Investment Fraud
Scammers can bring bad luck to anyone. They often tailor their pitches to their targets by starting out with seemingly benign questions—about your health, family, political views, hobbies or prior employers. Once they know which buttons to push, they'll bombard you with fraud tactics that can leave even the savviest person in a haze.
One of the best ways to avoid scammers is to learn how to spot red flags of fraud. Common schemes include imposter scams, in which bad actors impersonate actual registered investment professionals or firms—including via fraudulent “investment groups” promoted through social media channels—and relationship investment scams, which often start with a seemingly random message. Don’t automatically trust that an investment or a seller is legitimate, be skeptical of investment advice received from social media or encrypted chat groups, and never send money to people you’ve only “met” online.
Learn more about investing and how to protect your money.
