Back to (Financial) Basics
April 15th, 2021
April is Financial Literacy month, and here at Save First, we are celebrating by providing information, resources, and guidance about various financial topics. This week’s focus is on getting back to basics – those tenants of personal finances that are at the heart of creating a healthy financial life: setting attainable financial goals, tracking and budgeting your monthly money, saving for life’s unexpected events, and understanding your credit report.
Setting attainable financial goals is important in laying the ground work to start from. You want to set a goal that is appropriate for your situation. A good financial goal is one that stretches you just enough: not too easy, but not unrealistic. It’ll take some practice to find that right middle ground between too easy and too difficult. Start with an example: saving $2,000 over the next year for a car down payment. That’s around $170 a month. Would that be attainable for you? Too easy? Too difficult? Adjust as needed. The more goals you set and work toward, the more you will have a sense of setting the right financial goal for yourself.
So now that you’ve set a goal, how will you know you’re on track? Simple answer: Budget and track your money. This habit is essentially the bread and butter of financial wellness and why we can’t stress it enough. Take an inventory of what money you currently have, then set up some way to monitor your income and expenses monthly. Traditionally, this type of tool is a budget. There are a variety of options to keep track of your money (free apps, Excel sheet templates, even pen and paper), but the key for any is to use them. Meaning: actual track your income and expenses so you know what’s happening instead of guessing about your money. We promise it makes a huge difference!
Next up: SAVING! We have all experienced some of life’s curveballs – an emergency medical issue, a flat tire, a sudden loss of income, or something else that catches us off guard. In addition to logistical or emotional issues that these situations cause, they often come with a financial burden, too. That’s why always encourage people to save…wait for it…First. By creating an emergency fund and saving regularly, you can be more prepared for those unexpected financial expenses that comes your way. Our suggestion is to open a dedicated savings account and give to it each month. Start with opening the account and work toward saving $1,000 - that’s an attainable goal. If you’re not sure how much money you can give each month to savings, start by tracking your monthly income and expenses to figure out how much you typically have left over. Then, see what changes you can make each month to put money into your savings.
The last topic of financial literacy “basics” is understanding your credit. We consider this an important concept because it is at the foundation of gaining assets, like cars or houses, that many of us don’t have the cash to buy out right. “Understanding your credit” means knowing your history of borrowing money, what impacts your credit, and how to make changes to improve your credit. Check out two of our other blog posts on the topic: Taking Advantage of Free Credit Reports, and Good Credit Habits Earn Results.
Finances can feel daunting, but it doesn’t have to be that way. By getting back to your financial literacy basics, you’ll be on your way to feeling more confident when it comes to handing your money.
For more information on financial topics, reach out to our team about our upcoming Zoom workshops or ask about meeting with an experienced financial coach. Follow our social media feeds for more resources, content, and stories as we continue to celebrate Financial Literacy month throughout the month of April.