According to the U.S. Federal Reserve, nearly 40% of all Americans can't cover a $400 emergency expense without going into further debt. Worse yet, 60% of U.S. households do not have enough in savings to cover 3 to 6 months of living expenses. Today, let’s talk about some financial tips that can help you build a better financial future and avoid being part of those statistics.
- Focus on Your Needs First: Instead of worrying about vacations, new electronics, or other big-ticket items, focus on the basics. Those include rent/mortgage, food, clothing, transportation, and savings. Once you have those basics covered and can afford all the bills while putting away some money into savings, it could be time to add some wants to your list.
- Refinance a Loan or Two: Refinancing an auto loan, consolidating debt into a more affordable loan, or talking to lenders about forgiveness options can help you save a little bit of money every month. Instead of spending the money you save, put it into savings or toward your needs.
- Build Your Emergency Savings: Building an emergency savings account is a fundamental way to a healthier wallet. With enough savings to cover 3-6 months of bills and other living expenses, you won’t need to borrow money to pay for an emergency car repair or small medical bill. Putting just $20/month or $240/year into that account is a nice start.
- Evaluate Every Purchase over $50: Before every larger purchase, ask yourself and any directly involved family members if you really need to spend the money. If the answer is no, stop what you’re doing and either leave the store or remove the item from your online shopping cart. For extra credit, put a portion of the money you would have spent into your emergency savings.
Boost Your Financial Wellness
More Financial Wellness Matters blogs on topics ranging from financial self-care to protecting your financial health are coming soon. Twice a month, we’ll dig a bit deeper into the relationship between financial health and overall well-being, shedding light on the behaviors and beliefs that drive money relationships. With simple tips and proven insights, we hope to enhance your financial well-being and help you live a healthier, happier life.