Tips to Improve Your Finances
Getting an early start on effective money management skills can make it easier for you to accomplish your financial goals throughout life. Poor money management can lead to excessive debt build up, unnecessary stress, and in some cases dependency on others to help you make ends meet. Fortunately, we offer tips that can help you prioritize your finances and ultimately change your spending habits.
Identify Your Financial Goals
Setting up specific goals is an important part of life, particularly when it comes to your finances. As things in life change, so will your goals, which will require you to adjust. You can start by asking yourself a series of question in order to help shape those goals:
- What are some of your short term goals?
- What are your long term goals?
- How important is it for you to reach your goals?
- How much will you need to save for each goal?
After you have an idea of what your financial goals are, you can start arranging a budget to help you meet them.
Create a Budget
When creating a budget, it’s important for you to first list all of your sources of monthly income and any expenses you currently pay for. This can include anything from groceries to car insurance. In doing this, you will be able to determine exactly how much you are spending each month compared to how much you make. Are you spending more money than you make? If so, you will want to look into areas that you can start cutting back on in order to optimize your savings. A helpful way to make sure you are staying within budget is to track your purchases on a daily basis. It may seem tedious in the beginning, but this will make you more aware of your spending habits. Budgeting apps can also be helpful tools to keep you on track to reach your financial goals. We offer a Money Manager tool that makes managing your finances easier than ever.
Establish an Emergency Cash Fund
Life can throw all sorts of curveballs your way, so it’s important to stay ahead and be prepared for the unexpected. In order to set up an emergency cash fund you will need to allocate a percentage of your paycheck each pay period separate from money for everyday use or bills. This will ensure that you don’t use money set aside for other purposes in the event of an emergency. Consider saving a designated amount of any bonuses you earn, financial gifts you are given, or your tax refunds to go towards this emergency cash fund. You can also look into interest bearing savings accounts or certificates to help you put money away. We offer a Super Saver certificate that is great for saving money to meet long term goals or cover you in case of an emergency.
Consolidate Your Debt
Racking up a substantial amount of debt can cost you money and keep you from being able to reach your financial goals, especially high-interest debt. Consolidating your debt can help you in more ways than one. Debt consolidation allows you to take multiple high-interest bearing balances with different payments and combine them into one lump sum. This allows you to simplify your payments, can earn you a lower interest rate, and can save you money on monthly payments. The more you save, the more you can apply to your financial goals.
Find a Side Hustle
Not everyone has the free time to find a second job or a side hustle, but if you find that you have the extra time, consider looking into this option. A second job will allow you to gain extra income that you can apply to your savings or even put towards extra payments to pay down debt. Whether you decide to put the extra money away for later use or decide to pay off your debt, a second source of income can definitely boost the amount of money you are able to save, putting you closer to your financial goals.
At Robins Financial Credit Union, our mission is to enhance the financial well-being of our members and community. We honor this commitment by providing educational content to help you make the most of your finances. Read our other blog articles to help you gain the financial knowledge you need to succeed.