Easy Financial Literacy Tips
Learning how to make smart choices with your money and following some easy financial literacy tips goes a long way in securing a stable and prosperous future for yourself and your family. Well-managed funds can make your goals more achievable and grant you peace of mind. Continue reading to explore tips for budgeting, saving, investing, and more!
Budgeting Basics
Understanding and managing your money starts with a budget. And contrary to what you might think, budgeting is not about restricting your spending—it’s about granting you financial freedom. A budget ensures that you have complete knowledge of your financial situation and control of where every dollar is going. The simplest way to make a budget is to subtract your total monthly expenses from your total monthly income. Determine how much you need to spend on essentials, what you would like to spend on entertainment, and place any leftover funds into a savings account. Writing your budget down, tracking every purchase, and using financial planning software are great ways to keep you accountable.
Saving Strategies
Let’s talk more about saving. How much should you save? What accounts should you put savings in? A popular percentage-based budget is called the v rule. This suggests spending 50% of your income on needs, 30% on wants, and saving the last 20%. Of course, these numbers are flexible and depend on your personal situation. Another common rule of thumb is to always have three to six months’ worth of expenses in your savings account in case of emergencies. An easy way to ensure you’re saving this money every month is to set up an automatic transfer of a specified amount into your savings account every time you receive a paycheck. SharePoint CU offers an easy, secure Payroll Deduction program for this purpose.
Investing for Beginners
You may put fewer funds into your savings account if you decide to invest in stocks, bonds, or real estate. Investing is a key aspect of growing your financial literacy, and anyone can do it! If you’re just starting out, consider trying SharePoint CU’s EasyVest™. It’s an automated investment management tool that will continuously optimize a strategy tailored to your financial goals. We also offer professional investment and advisory services to help you grow your wealth. Whatever strategy you employ, remember to diversify your investments across several businesses to reduce risk.
Managing Debt
From credit cards to student loans, many people live with debt. But it doesn't have to control your life. Take a look at your budget and see if you can shift any funds from non-essential categories into a debt repayment plan. Try to spend less on things you don’t need, be slow to take out additional loans, and maybe look for a side job to earn extra cash. Setting up an auto-pay system ensures you won’t miss payments, and paying more than the minimum amount reduces your debt faster.
Invest in Your Future with SharePoint Credit Union
SharePoint Credit Union is a local, trusted financial cooperative for those looking to make their money go farther. If you’re interested in better rates on deposits and loans and a cooperative that always works in your best interest, contact us today. And for more financial literacy tips, check out our other blogs.
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