Posted on April 21, 2022 Last Updated: April 21, 2022
How to Establish Healthy Financial Habits
Unfortunately, many consumers in the United States are not well-educated about money and how to effectively manage it. This has led to high-interest credit card and personal loan debt that’s sweeping the nation. To help our members establish a solid financial foundation, we’ve put together a list of some key actions everyone could be taking.
Live Within Your Means
This is a big one that many people ignore. Living within your means is incredibly important to living a financially healthy and stable life. What does ‘living within your means’ actually mean? It means that the lifestyle you live should match the income that you generate. Your purchases and money management decisions should be in line with how much you make and your expenses. If you’re making just a couple of dollars over minimum wage, living within your means rules out buying a new car or having a housing payment that stretches your budget thin.
Keep an Eye on Your Spending
Managing your spending is pivotal to living a financially stable life. The best way to keep your spending in check is to create a budget, which simply means you line up your expenses with your income and only spend money on things that your monthly income can support. A budget not only helps you spend more wisely, but it can help you identify any unnecessary spending. Following a budget may help you put more money in your pocket at the end of every month!
Build an Emergency Fund
Having an emergency fund is important because emergencies happen and often at the worst times. An initial emergency fund of $1,000 will help you cover any major expenses that don’t fit into your monthly budget. Once you have your $1,000 in place, take your emergency fund a step further and save 3-6 months of your monthly expenses. The expanded emergency fund can help you cover expenses in the event of a job loss or a medical issue that keeps you from working.
Manage Your Debt Effectively
Many Ohio consumers carry large amounts of credit card debt. Unfortunately, revolving credit card debt often comes with high-interest rates, which means a high-interest credit card can wreck your personal finances quickly. Staying financially healthy means keeping your debt in check. Avoid using personal credit cards to pay for things that don’t fit in your budget and transfer those high-interest balances to a lower interest rate card to pay down your balances more quickly and save you money. Once you’ve paid your debt down, be sure to spend within your means to avoid ending up in the same situation.
Invest for Retirement
Although retirement is quite a few years down the line for most of us, it’s important to start saving as soon as possible. After all, you’re going to need a sizable amount of money to retire and live comfortably when the standard paychecks stop coming in. It takes a lifetime of saving your money and investing wisely to retire comfortably.
KEMBA Helps Members Grow Their Wealth
One of our goals is to help Central Ohioans manage their money more effectively. Our Digital Banking tools provide access to your accounts to make payments, transfer money, and more, plus give you the opportunity to keep an eye on your finances. We also offer one of the best cash-back rewards credit cards in the industry with an everyday low-interest rate, which not only saves you money on your everyday purchases but also allows you to transfer balances to get out of debt faster. If you are looking to get your personal finances back on track, contact our dedicated local associates for help. Call 614.235.2395 and select Option 4 for more information.