Money worries know no age limit, and financial health is important for everyone, which is the goal of Money Smart Week, a week-long series of free financial programming and seminars that will take place in the Bloomington area the week of April 18th – 25th. The topics are geared to specific areas of interest and cover everything from how to save for your first home to the best way to handle wealth distribution, wills, and trusts.
No matter what your specific area of interest might be, here are 5 smart money moves that everyone can benefit from.
- Scrutinize your current spending. It’s impossible to save money — or achieve any other financial goal — until you have a handle on your spending. Gather together all recurring monthly bills, such as utilities and rent, your mobile service provider, groceries, entertainment, etc. Calculate how much you spend in a month. Is it almost as much as you earn? Is it more? Look for areas where you can reduce spending and categorize them as needs versus wants. Cutting unnecessary spending is a good start, but don’t overlook possibilities for trimming necessary expenses as well. For example, it might be a good time to talk to your phone company about a cheaper plan.
- Build a budget. It is estimated that 61 percent of American adults don’t have a budget and don’t keep close track of their spending, according to a Harris Poll commissioned by the National Foundation for Credit Counseling. Not having a budget is like attempting to quarterback a football game without a game plan. Budgeting not only helps you stay in control of your spending and saving, it can make you feel more in control, confident, and empowered in other areas, too. Your budget should provide for necessary recurring expenses (like food, utilities, rent, transportation), retirement, and regular savings, as well as some money for fun. You can find plenty of budget templates through online resources.
- Establish an emergency fund. More than a third of Americans 18 and older say they have no savings (excluding retirement savings), according to the 2014 Consumer Financial Literacy Survey. Rainy-day savings can help you pay for emergencies — like an unexpected car repair or dental work — without forcing you into debt. What’s more, putting money into an emergency fund with every paycheck helps you form a savings habit, and can ease the emotional stress of worrying about financial emergencies.
- Set financial goals. Look back at 2014 and assess which goals you achieved and which need to be refreshed for 2015. Consider what you did that helped you succeed in certain areas or where you might need to adjust. Evaluate where you most need to focus your attention. Don’t overwhelm yourself by trying to do everything at once. Instead, focus on one or two key financial goals.
- Keep an eye on your credit. Sixty percent of American adults haven’t reviewed their credit score within the past 12 months, and 65 percent haven’t looked at their credit report, according to the Harris survey. Credit is a vital element of overall financial health. Begin regularly reviewing your credit report and score — doing so does not negatively impact your score. Good credit not only affects your ability to secure future credit — such as a mortgage — your credit score can influence what you pay for some forms of insurance, whether utilities might require you to provide a security deposit when opening a new account, and even your ability to get a good job if you apply with an employer who requires a credit check.
Good financial habits can make a lifetime of impact, so make a promise to yourself to be good with your money.
Free Money Smart Week classes will be held on April 23 and 24 at Heartland Community College. For more information about Money Smart Week, visit moneysmartweek.org.