To get started on the path to wallet wellness, you often need to start small. But you can have fun in the process! As your new outlook becomes second nature, you can finally begin to focus on the four things that matter for your financial future:
1. Have an emergency fund.
This is your reserve fund in the event of an unforeseen emergency, job loss or an unexpected expense. A good rule of thumb: set a goal of having three to six months’ salary in your emergency fund. Every little bit helps! For example, saving $5 a week is the equivalent to giving up a latté.
2. Take control of your debt.
There’s often a connection between emergencies and debt, but that’s not the only reason people get into debt. Chronic consumer debt has become an epidemic on Main Street, and families now struggle more than ever to make ends meet. Debt is one of the biggest threats to your financial wellbeing. Take control by identifying your debt and learning how debt stacking can lead to freedom. They say you can eat an elephant – one bite at a time. The same concept works with paying off your debt!
3. Protect the things you love.
One of the most important expenditures a family makes is also one of the most misunderstood. In the event you can no longer provide for your family, it’s absolutely critical that you make the right decision when it comes to protecting the things you love. It’s hard to talk about the “worst-case scenario,” but being properly protected can have a huge impact on your family’s security and peace of mind. Don’t be afraid to ask the experts if you don’t understand! It’s better to find out now than to later wish you could go back in time and do it all over again.
4. Save for the future.
Finally, you want to think about your long-term savings. Your goal is to save for the future! There’s a high cost to waiting, so it pays to start early. Don’t get so focused on the future that you succumb to the “I can start tomorrow” attitude! According to experts, “The trick to making a savings plan stick is to think about small, specific things that can be repeated over time.”1 Time and consistency are two of the most powerful keys to achieving financial security.
By focusing on these four keys to your financial future, you can get started on the path to freedom and independence. The tiny battles you face day to day will ultimately help you win the “war” for your wallet!
1. TIME.com, “Want to Save Money? Stop Thinking About the Big Picture,” January 9, 2014