Financial Life Tips
We often spend so much time trying to earn income; we forget to learn what to do with it. Let's go over some tips together!
1. Get Paid What You're Worth and Spend Less Than You Earn
Much has changed during the past two years. Remote working and outsourcing have reset what we think about our personal value to any company or industry. Know what your job is worth in the marketplace; evaluate your skills, productivity, job tasks, contribution to your employer, and the going rate for what you do outside your company.
However, if you're guilty of spending more than you earn (and don't feel any shame about that - many of us have been there), reevaluate your expenses. It's typically easier to spend less than it is to try to earn more.
2. Budget
Setting and tracking a budget can be hard to start at first. Reach out to us to see how we can help you get going. It's simpler than you may think, and it's the first step on your path to financial freedom and building wealth.
There's a simple formula to get started called the 50/30/20 rule; it's an easy budgeting method to help you to manage your income more effectively. The basic rule of thumb is to divide your monthly net income into three spending categories:
- 50% for needs (rent/mortgage, food, supplies, etc)
- 30% for wants (family outings and things you'd like to own or experience)
- 20% for revolving debt payoffs and savings (definitely don't skip this one)
Learn more about budgeting with our partner, Trinity Debt Management’s personal finance program.
3. Pay Yourself First
This is the best way to start building wealth or, at the very least, a buffer to avoid getting into more debt. It's as easy as making sure a small but significant amount (as little as 5%) of your direct deposit from your employer goes straight to your Savings/Share Account.
4. Take Advantage of Your Benefits
Employment benefits like a 401(k) plan, flexible spending accounts, medical and dental insurance, etc., can save you a lot while you're working. Speak to your HR representative on how to maximize these. Again, you can always reach out to us to help you understand and navigate these sometimes-confusing matters.
5. Keep Good Records
If you're not doing this, you're probably not taking advantage of all your allowable income tax deductions and credits. Don't scramble during tax season - speak to an accounting professional on how to get started. And - as always - your not-for-profit credit union is here to help.
Remember: we're always here for you. Talk to us about how to create and reach attainable goals and move your financial life forward!