We’ve pulled some financial tips together to help you put money aside for the future, plan for a big purchase, and simply do a better job allocating your money. But you don’t have to do any of this alone: You can stop by any of our three credit union branches and speak with a certified financial counselor who can give you great advice on budgeting, ideas to plan for retirement, and more.
Tip 1: Set A Budget
We know some people get anxious about setting a budget. But it’s even more stressful to run out of money before you run out of month. In fact, setting a budget can be empowering: Once you get a handle on your monthly income and expenses, you’ll feel in control of your money, rather than the other way around. And you won’t have to wonder whether you can really afford that night out, or that new TV.
Start by noting how much money you earn. Then assess how much you spend on essentials like housing, utilities, food, insurance, clothing, entertainment, and more. If your income is greater than your expenses, that’s a good start—you can choose how to spend the rest. If it isn’t, you’ll have to come up with ways to reduce what you spend.
Bonus budgeting tip: Write your budget on paper. Seeing and writing the numbers makes it real, and easier to follow.
Tip 2: Build a Nest Egg
Saving money doesn’t have to be hard. If you can put even a little aside every month, it will be there for you in case of an emergency.
Our advice: Pay yourself first. If you put money aside before you do anything else, you’ll never miss it—and it will be working for you in the background, growing over time.
The first step in a pay-yourself-first strategy is to make a budget. Remember looking at the difference between your income and expenses? If you commit to putting part of that difference aside every month, that’s the first step to saving. Don’t worry about the amount—putting aside even a few dollars is a good first step. If you can do more, that’s great. And you’ll still have the rest to spend on whatever you like.
Tip 3: Check Your Credit Score
Your credit score is the key to borrowing money. If it’s too low, you might not be able to borrow at all—or you’ll have to pay extra for a loan, in the form of a higher interest rate.
If you’re planning to be in the market for a mortgage, car loan, or other loans, take a look at your credit report now to make sure it’s accurate. You’re entitled to a free copy of your credit report every 12 months—go to AnnualCreditReport.com. In general, scores in the 700s are good, while scores in the 800s are excellent.
If your credit score is lower than you’d like, you can take several steps to improve it. Paying down credit cards and other revolving accounts, making payments on time, and applying for fewer new accounts can make a big difference. Having some credit experience is good, though—credit agencies like to see you’ve done a good job at maintaining accounts. So if you’ve never had a credit card, it doesn’t hurt to open one and pay it off every month.