3 Steps to Assess Your Savings this Financial Literacy Month
Financial Literacy Month is the perfect time to assess your finances and evaluate your level of savings preparedness. If you have an exceptional ability to manage debt, maintain an emergency savings fund and plan your finances, you’re already a great saver. If you want to improve your savings habits, start by asking yourself these questions.
- Do you have a financial plan that includes savings and debt management goals?
Savers with a plan are twice as likely to save successfully. You’ll feel more motivated to save money if you have a plan in place. You can start your financial plan by creating a budget based on your monthly and expenses. It’ll get much easier to save if you have a goal in mind to keep yourself motivated.
Reducing debt is just as important as saving, so you should include debt management in your financial plan. You can begin by paying off your high interest rate debt first. The longer you wait to pay it down, the more money you’ll end up spending. You can also focus on paying off smaller debts first.. Sometimes, getting rid of smaller debts will give you the extra push to tackle your larger outstanding balances.
- Do you have an emergency fund to cover at least $500 of unexpected expenses?
If you make saving for a rainy day one of your top priorities, you’ll thank yourself later. When unexpected expenses occur, you’ll be financially prepared to deal with them. One thing you can work toward with your emergency fund is saving enough money to last for three to six months if you were to lose your job. When you have that much cushion, you’ll feel much more confident about your finances.
- Do you save money automatically?
The easiest, most effective way to save is automatically. Set up direct deposit into your savings account, so a portion of your paycheck can go into savings each time to you get paid. You’ll be surprised at how much money you can save when your contributions are consistent. This also helps to ensure that you don’t give up. Putting money in your savings account might be easy now while you’re excited to get started, but it might get a little hard later on. When your savings are automatic, you don’t have to worry about losing your momentum.
You should also make your retirement savings automatic. If you’ve opted into the Blended Retirement System, don’t forget this important step! Set up automatic contributions of at least 5 percent into your Thrift Savings Plan (TSP) to get the full match owed to you.
Let Military Saves help you save money so you can feel confident about your finances. It all starts when you make a commitment to yourself to save. Take the first step today and take the Military Saves pledge to save money, reduce debt, and build wealth over time. And it doesn't stop there. Military Saves will keep you motivated with information, advice, tips, and reminders to help you reach your goal. Think of us as your own personal support system.
Are you a good saver? Follow these three steps, and you’ll be on your way! >> https://bit.ly/2EFvjbX v/@MilitarySaves
- Written by Darlene Aderoju
- Category: Blog
- Published: 11 April 2018