What if Less Financial Stress was waiting under Your Christmas Tree?
Would you believe US if we said a budget plan could help YOU be healthier and happier? People are often surprised by how much better they feel after they make a budget – and learn to stick to it. In putting pen to paper and creating a plan with your financial partners here at US Community Credit Union, both for short- and long-term financial goals, it can help you take a step back and determine exactly where to start to help you reach your savings goals.
Think of it in terms of fitness. In order to achieve your goals in the gym, you must set a goal and stick to it. This plan carries beyond the gym, including what happens in your kitchen or at restaurants as well. Financial fitness is similar – it’s not about dieting, but rather about getting and STAYING healthy long-term. The change is almost certainly harder in the beginning, but once it becomes a part of your routine, you learn to find comfort in the challenge.
Let’s take a look at the below financial fitness tips from our partners at GreenPath Financial Wellness:
Take the First Step
The first thing to do is understand your overall financial situation so you can put your money to work for your goals. A few starter questions can help you get an idea of what you have to work with, what your commitments are and what else you can put towards your goals. Be honest about your spending habits – it often helps to write everything down. Use your USCCU Mobile App or Online Banking to look at all your expenses for the 45-60 days to be sure you don’t miss anything.
Set a Specific and Detailed Goal
Your savings goal can be big or small, just as long as it is specific. Include a time frame to reach your goal. Saying “I want to save money” doesn’t set a clear picture of what you want to save money for OR how you are going to get there and when. Instead, “I want to save money for a $1,200 computer. If I save $100 every month in 2020, I can buy the new computer by December 2020.” Write it down also.
Understand Your Take Home Pay
This step is the most important step after you set your goal. In order to know how much money you can realistically save each month towards your new computer or car or paying off debt, etc. you have to know and understand your monthly total take-home income. This means evaluating any income sources (paychecks, child support, second or third jobs), after taxes.
What Are Your Required Expenses?
Once you know how much money you bring home each month, you need to know how much money you spend each month on necessities like rent or mortgage, bills, utilities, minimum credit card payments, groceries, cable, etc. The overall hope is that the take home pay exceeds your required expenses. This leaves you a leftover amount, or discretionary income. Included in your discretionary income is any “fun money” you want to have for the month for outings with friends, going to the movies or even picking up that latte from your favorite coffee spot.
What Is Left Over?
Once your required expenses and “fun money” has been accounted for, do you have any money left over? If so, this is the amount you can apply towards your goals. Think about what is most important to you, and what you need to get there. What you decide to do with your discretionary income is all about you and your goals.
Remember, you are in charge of your plans. We certainly recommend paying off debts first and making savings a priority. You can always review your budget and adjust your goals along the way.
Budget Not Balancing? There’s Help Available
If your income is less than your commitments, don’t panic. Writing down and understanding your budget can help you find places to save money and trim expenses. In addition, if you want to speak with someone, GreenPath offers free debt and credit counseling. For people who need it, a Debt Management Plan can lower your interest rates and fees, and help you save money and pay off your debt faster.
Whatever your financial situation is, a budget and a plan are great first steps on your path to meeting your goals. Put that in your stocking or under your tree this holiday season. And remember, USCCU is always here to help you reach your financial dreams.