7 Tips on Being Money Savvy
While money will not bring you happiness, financial security can help you plan for your future and the needs of your family. Here are a few simple tips that can help you and your family become more money savvy.
- Create a budget. Making a spending journal for at least two weeks prior to creating a budget is a good place to start. This will help you establish realistic numbers. A comprehensive budget will not only tell you where the money is going, it can give you a map to tightening expenses and will allow you to put more money away for your short-term and long-term goals.
- Luxury vs. necessity. Define the difference between luxuries and necessities. Many of the items we spend money on are things we want. If the item doesn’t fit comfortably into your budget, you need to set it aside until your budget is ready to handle the purchase. Until the money is in your account, don’t spend it. Focusing on your present financial state will help you reach your financial goals in a more realistic fashion.
- Have the facts. If you know the details of your family’s finances, investments, debts, and retirement savings, you are more likely to come out of a negative situation on top. Not knowing can produce a lot of heartache and financial strain that could easily have been avoided if tragedy or unexpected hardships occur.
- Make wise buying decisions. Consumer spending decisions are processed much less by numbers and much more by emotions.
- Think first. To avoid over-extending yourself, think before you act. Before you sign on the dotted line for a large ticket item, such as a house or a car, examine your budget and rent or borrow the item to ensure that your purchase will be a true fit.
- Buy what you can afford. If more than 20% of your monthly net income is going to pay credit cards and other loans, there are signs of financial problems in your future. Use cash to make your purchases or only buy what you can afford and avoid credit card debt that will prevent you from reaching your financial goals.
- Set obtainable goals. As you work to make more savings decisions that are best suited for you and your family, remember to set small goals and savings options that are obtainable. You will be surprised by the outcomes and peace of mind that simple planning will bring.
NobleBank & Trust is here to help you with tips for being money savvy. Visit our website at www.noblebank.com for additional financial resources. Member FDIC and Equal Housing Lender.
Senior EVP & Market President
NobleBank & Trust