Old habits die hard, especially with money. If you are constantly finding yourself in less-than-ideal financial situations—whether it be having no savings or maxing out your credit cards—now is the time to change things up.
Here are a few quick tips that will make all the difference for your financial health:
Track Your Spending
Keeping track of expenses, while sometimes tedious, is the best way to find out exactly where all your money is going.
Every week, take some time to review your transactions. Take note of how much you’re spending on rent, utilities, insurance, and grocery store trips, and compare with other expenses, like the going to the movie theatre, gifts, takeout, etc.
Eating out for 50% of your meals? Cut that back to even 25% and cook or brown bag the rest, and you’ll have a nice chunk of change to contribute to paying down debt, building up your savings, or achieving other financial goals you may have.
Based on your financial goals, draw up a budget for yourself and stick to it. Adhering to a budget is crucial to maintaining and improving your financial health.
Pay More Than the Minimum on Your Credit Cards
Your credit score will thank you. Strong credit is a crucial element of so many important lifestyle decisions—from buying the perfect home to landing the job you need.
An easy way to keep your credit score on the right track is with SavvyMoney, a comprehensive credit score program that instantly provides a credit score analysis, full credit report, monitoring, credit alerts, and personalized offers—all in one dashboard! If you’re an RMLEFCU member, you can access this helpful tool via online banking or our mobile app.
Pay Yourself First
An easy way to save a portion of your income for specific goals, such as buying a car or paying for your child’s college tuition, is to automate a monthly transfer from your checking account. You can set this transfer to occur right around or after the time you expect your paycheck to settle on your account; that way, before you spend it on anything else, you’ve set aside a portion for savings. This simple method will surprise you—the money adds up fast!
Build and Maintain an Emergency Fund
An emergency fund is just what the name implies: money that has been set aside for emergency purposes. The fund is intended to help you pay for things that wouldn’t normally be included in your personal budget, like car repairs or an emergency trip to the dentist. It can also help you pay your regular expenses if your income stream is interrupted; for example, if an illness or injury prevents you from working or if you lose your job. In today’s economic environment, it’s a good rule of thumb to aim for saving at least six month’s worth of living expenses—more if possible.
There are a few easy ways to start building your emergency fund:
Set aside a comfortable amount from your salary each month: Just like we recommended for the “Pay Yourself First” section, setting up an automatic monthly transfer from your checking account is a great way to start.
Save your tax refund: You may be tempted to think of a tax refund or stimulus check as an excuse to go on a shopping spree or an impromptu vacation. Instead, consider diverting it toward your emergency fund to give you an added financial cushion.
Investing is important, if not critical, to making your money work for you. You work hard for your money and your money should work hard for you!
One way to start investing is to begin contributing to your employer-sponsored retirement plan if one is available. If you’re already investing in a retirement plan, you can also set up an Individual Retirement Account (IRA) with RMLEFCU.
Let Us Help You Achieve Your Financial Goals
No matter where you are in your financial journey, there’s almost always room for improvement. RMLEFCU is committed to helping you achieve your financial goals—stop by one of our branches, give us a call, or send over an email to email@example.com and we will work together to strengthen your financial habits and thus, your financial future.