We all know people who are ‘good with money’. Hopefully you’re one of those people. We all know people who are decidedly NOT good with money. Hopefully you can distance yourself from them when they ask you to cover for them yet again. But what does the phrase actually mean?
- Living within your means
- Paying your bills on time
- Having a nest egg for emergencies
- Saving enough during your working years to fund your retirement
Some folks seem to be good with money instinctively. Others struggle with the concept – money seems to burn a hole through their pockets and they’re always strapped. There’s less of a correlation between making a lot of money and being good with money than you might think. Some people make a lot but crash and burn fairly frequently; others don’t make much but live quite nicely with little financial drama.
Most members of the Credit Union want to be good with money. So, where do you start? Let’s take the four statements above one at a time.
First, track your spending. Don’t spend more than you make. No impulse purchases. It could mean you change shopping habits, clip coupons, stop the daily cup of coffee, change the thermostat, etc. Move from cash to using Internet BillPay or a debit card. Know how much is coming in and how much is going out.
Pay your bills on time. If you’re prone to forgetting, pay the bills as soon as you receive them. Float isn’t important in a low-rate environment. Never be late paying a bill or your credit score could suffer. A high score means better loan rates, better insurance rates, and paying lower utility and rent deposits. Online banking and mobile banking are available 24/7 so pay bills as soon as you get them.
Save every month. The nest egg for emergencies cannot be too big. Funds not needed for short-term emergencies can then be invested. Set up an automatic transfer into a savings account for every paycheck you get. You won’t miss the small amount swept into that savings account and you’ll be glad you have that nest egg when the air conditioner breaks or the car needs a repair. To save smaller amounts more frequently, ask about the Credit Union “save the change” program. Don’t save what you have left over every pay period. Rather, pay yourself first then spend what’s left.
Plan to retire comfortably. Contribute as much as you can to your 401(k), especially if a portion of those contributions are matched by your employer. Online tools can be used to project your retirement account accumulation and projections. The experts at the Credit Union’s Financial Planning Center can help.
Are you good with money? Whether you are or not, your Credit Union can help. The people at Day Air are good with money and part of our passion is financial education. Our mission is to enhance the financial well-being of our members, and that means helping you become better with your money. Stop by a branch and talk with us. We’ll help you along the path of becoming better with money than you already are.