Take control of your finances.
Saving money is a leading New Year’s Resolutions each year – it’s clearly important to us! So, over the course of the next few weeks, we will be exploring key elements of financial literacy, to help you achieve your financial goals. We’ll cover all the things your parents should have taught you, or you should have learned in school, but didn’t.
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We all know that budgeting is important – we have heard it said over-and-over – but why is it important and how do you do it?
Whoa…a little scary, don’t you think? This means that the majority of us are not making it month-to-month on what we earn; we are going into debt just to maintain our day-to-day cost of living. So what happens when an emergency hits? More debt.
And the only way to get out of debt, stay out of debt, and start saving for the things you want and need, is to come up with a plan – a budget.
A budget is simply a plan for how much money you are going to make, spend, and save. You can do this with pencil and paper, in an electronic spreadsheet or budgeting app, or by using personal financial management tools within our online banking system.
The great thing about using personal financial management tools is that they often categorize the transactions for you, which saves time and helps you figure out where your money is going. They will also keep track of how you are doing at meeting your goals. We think our personal financial management tool is great – it’s free and you don’t have to download more apps or create new logins – but there are lots of tools out there, so find the one that works best for you!
Once you’ve decided on a method, it’s time to create your budget. Track your income and expenses and then decide how and where to cut back to help you reach your goals. It might be as easy as cancelling subscriptions or memberships you aren’t using, or making your vanilla latte instead of buying it. Regardless of how you create your budget, make a commitment to stick with it, at least most of the time (we all cheat sometimes!). You will be surprised how much of a difference it can make in a short amount of time.
And what to do with your newly freed up cash? Check back next week when we talk about saving!Previous: Email Compromise: the $26 Billion Scam! Next: Save Better in 2020