Here are four important things that you should know about managing money.
Today I want to dive into one of my favorite topics lately: money! I don’t know about you, but when I was growing up, we didn’t have too many conversations about money in my house. There were no money classes in school either.
The advice that I needed to save at least 10% of my earnings and to always balance my checkbook (yes, this was back in the day where we actually wrote checks, before the invention of debit cards) is all I remember being taught.
It seems that when it comes to money now, we all know we need to make some, save some, invest some, and give some away. Yet, I’m still asked the question, “What should I do with my money?”
The answer to this question varies from person to person. However, the tips I’m about to share apply to most everyone whether you’re in your 30s or 60s and whether you’re married or single. These are the basics, the starting points, and it’s important to complete them in the following order:
1. Budget for a better life. Create a zero-based budget every single month. It’s the basis of all other financial goals. Without a budget, how do you know if you have enough income to cover the cost of your other goals? How do you know what your expenses are that may need to be covered if you lose your job? The answer is that you don’t!
2. Create an initial emergency fund. Start with $1,000 and put it in a separate savings account. Only touch it for emergencies.
3. Pay off all consumer debt. This includes credit cards, student loans, car loans, and more. Payments on federal student loans have been paused until January 31, 2022, so use the money you were paying on those loans to expand your emergency fund and pay off credit cards.
4. Continue to build your emergency fund. Save three to six months’ worth of expenses if you can.
These are just the basics of good money habits. There’s a lot more to learn, but starting with these baby steps is a great foundation. I know of a lot of people who did things out of order, and it didn’t work out well for them.
You are capable of living the joyful life you want to live and becoming a master of your money. You do not have to do it alone! Ask for help when you need it. It is not a sign of weakness to ask for help. It’s an act of self-love to ensure you achieve your goals.
Not sure where to start? As a life and financial coach, I’m here to help. Schedule your complimentary breakthrough call today! Don’t hesitate to reach out with any questions in the meantime. You are worth the effort. Let’s make a plan that gives you that roadmap to reach your goals.