Personal finance can be a daunting subject for most people. It can certainly feel overwhelming at times trying to figure out the best way for you to achieve the financial success you would like to reach. The good news? You don’t have to take a course in “banking 101” to get there! BHCU, Your Delaware County Credit Union, is here to provide you with the resources to assist you on the path to financial independence. Our experts have put together six keys to reaching financial success:
- Prepare A Budget
Creating a budget enables you to see a real, full-scale picture of your financial situation. A personal finance planner can help you set up a budget so that you are able to pay off debt, plan for your future and give you peace of mind that if large expenses come up, you will be able to afford them.
- Identify Your Expenses
It can be truly eye-opening to keep track of all your expenses over the course of a few months. On average, most people do not know what they spend on a monthly basis and, in order to have a solidified financial plan, this information is essential.
Keeping track of your monthly expenses does not have to be difficult. Look over your credit card bills and input your charges, (along with any cash spent), into a spreadsheet. This will show you exactly what you are spending on and how much each of these items is. This will enable you to see what your fixed expenses are and where you may be able to save on unnecessary purchases.
- Know Your Income
Everyone should know what their overall income is, however, what they may not know is how their income and outgoing expenses correlate. It’s important to know exactly how much you make every month and how much your expenses are so that you can make sure you are not spending more per month than you are making. In addition, if you know that you are bringing in more than you are spending, you should know your options on how to save that money or invest it for your future.
- Consolidate Debt
The majority of Americans have debt. It’s important to understand exactly what your debt is so that you can consolidate it and look for low interest rates to pay it off. Keeping a consistent payment schedule is key to reducing debt!
- Eliminate Unnecessary Expenses
Simple things in your daily routine, such as grabbing a coffee, can add up big time over the course of a year. Eating lunch out, getting your nails done and having a gym membership are all things that can add up to thousands of dollars a year that you could easily substitute for a less expensive alternative. We’re not saying to cut all of these things from your life, but taking a look at how much they cost can allow you to pick and choose what you keep and what you discard to get you to the financial place that you want to be in.
- Save For Retirement
It is recommended that you save 10-15% of your monthly income for your retirement. Saving is the ticket to a future where you can enjoy your retirement without having to worry about home and healthcare costs. It can also give you the ability to do some of the things that you have always wanted to do, such as travel or purchasing a vacation property. These things are possible if you plan and save for them!
Hopefully these tips have eased some initial stress about how to get started. Achieving financial success takes place over time. We all learn along the way what works best for us.
If you still don’t know how to get started, BHCU’s Financial Planner, Bob Protesto, is a great resource for our members. He is a fully licensed Certified Financial Planner able to assist you with creating and attaining your personal finance plan.
Interested in learning more about how you can become the personal financial planner for your household? BHCU will be hosting a Financial Planning Virtual Webinar Series this October! Stay tuned for details!
