Three Signs You May Need to Clean Up Your Finances
It’s easy to see when your house needs cleaning: clothes are on the floor; dirty dishes are stacked in the sink. But it may be a little harder to know when to “tidy up” your finances. Here are a few signs:
1. You’re living paycheck to paycheck- If you barely make ends meet at the end of the month, it’s time to buy yourself some wiggle room for unexpected events. Start by cutting back on at least one major expense and putting that money into an emergency fund. The goal of an emergency fund is to be able to cover a three-month period of unemployment at a minimum. Consider downsizing to a smaller home or apartment, going from a two-car household to one, or even carpooling.
2. You’re not saving for retirement- According to Northwestern Mutual’s 2018 study, 21% of Americans have not saved for their retirement. If you’re one of those people, it’s time to start. Your goal should be to save 15% or more of your monthly income for your retirement. If you’re not used to saving, going from 0 to 15% might be hard. So, start small and simply set aside $50 each month. Increase that amount when you get a raise or get a better handle on your expenses.
3. You don’t have a budget in place- Do you follow a budget? Many Americans don’t, even though it’s probably the most effective way to manage money. Without a budget in place, you’ll have a hard time seeing where your money is going, where you’re overspending and where you can make changes. Furthermore, a budget isn’t something that should limit you, but instead allow you more freedom as you know where your money is going.
If any of these signs apply to you, it’s time to clean up and learn how to manage your money. Come see an FCCU financial representative to help you get on a the right path to financial wellness.