By Dalila Maslesa, Gate City Bank Retail Manager
How we manage funds affects our opportunities, sense of security and quality of life – especially during uncertain economic times. Follow these seven smart money hacks to reach your financial goals and gain peace of mind in 2022.
Create a Budget.
It helps to start simple. Consider developing a monthly budget that anticipates expenses based on your spending habits and monthly take-home pay. The idea is to avoid having costs exceed income in a way that aligns with your lifestyle.
Distinguish wants from needs, and avoid impulse buys. Additionally, keep an eye on your checking account balance to avoid overdraft fees.
Set Up an Emergency Fund.
Life is filled with unplanned expenses that stem from unpredictable circumstances. This impacts financial stability, which is why it’s crucial to have an emergency savings account plan in place to provide cash during stressful times.
An emergency savings account is a separate cash fund, a rainy-day safety net that offsets expenses from an unforeseen financial crisis. This may include injury, sickness, job loss, repair or something similar. Such a fund is intended to help pay for things that wouldn’t normally be included in a normal budget.
Committing a certain portion of your income to savings helps grow your wealth. When you receive your paycheck, consider putting a certain amount of the money toward savings first, then live off the rest. It may help to auto-transfer funds into a savings account.
Track Your Progress.
It’s smart to set short- and long-term financial goals that are specific. Examples include children’s college funds, car purchases and home repairs.
Pay Bills on Time.
Always shoot to pay bills on time. Not only will this help you avoid unnecessary accrued interest and late fees, but it will also help your credit score.
Consider only using cash or a debit card to make purchases. By doing so, you may be more inclined to spend less money than you would if you were using a credit card. The idea is to only spend money that is actually in your possession. Credit cards can easily contribute to rising debt and a high credit score.
Embrace a Solid Investment Strategy.
It pays to have your money work for you, and talking to the right professionals can help.
This is also true for establishing a strong retirement plan. Think about the benefits of contributing to a 401(k) or other workplace plan. Contributions are made with pre-tax dollars, and taxes on earnings are deferred until you withdraw from them later in life. Plus, many employers will match all or part of your contribution.
Small life changes can make a big difference. By following these easy tips, you’ll be on the road to greater financial health.