4 Signs You Need to Clean Up Your Finances
Itโs easy to see when your house needs cleaning: clothes are on the floor; dirty dishes are stacked in the sink. But it may be a little harder to know when to โtidy upโ your finances. Here are a few signs and financial tips to consider today:
- Youโre living paycheck to paycheck
If you barely make ends meet at the end of the month, itโs time to buy yourself some wiggle room for unexpected events. Start by cutting back on at least one major expense and putting that money into an emergency fund. The goal of an emergency fund is to be able to cover a three-month period of unemployment, at a minimum. Consider downsizing to a smaller home or apartment, going from a two-car household to one, or commuting by bus or bike. Getting a side gig is another way to boost your emergency funding.
- Youโre not saving for retirement
According to Northwestern Mutualโs 2018 study, 21% of Americans have not saved for their retirement. If youโre one of those people, itโs time to start. Your goal should be to save 15% or more of your monthly income for your retirement. If youโre not used to saving, going from 0 to 15% might be hard. So, start small and simply set aside $50 each month. Increase that amount when you get a raise or get a better handle on your expenses. View your savings options with NCU!
- Youโre carrying credit card debt
There is good debtโmortgages for homes and loans for educationโbut there is also bad debt. Credit card debt is the worst kind of debt you can have, and the longer you carry it, the more money you end up losing in interest. If youโre up to your chin in credit card debt, maybe itโs time to create a budget and move to a cash-only system until your debt is under control.
- You donโt have a budget in place.
Do you follow a budget? Many Americans donโt, even though itโs probably the most effective way to manage money. Without a budget in place, youโll have a hard time seeing where your money is going, where youโre overspending, and where you can make changes.
If any of these signs apply to you, itโs time to clean up and learn how to manage your money. Youโll be thankful in the long run.
Additionally, get in touch with someone at NCU. We are here to help!