By Jocelyn Wood
Consumer costs may be rising, but do not let that stop you from improving your financial health. Here are three tips to help you thrive during inflation.
1.Pay yourself first.
Whenever you receive money, be it your paycheck, a gift or a bonus, put a portion of it in an interest-bearing account. We often make excuses as to why we cannot save, but the reality is, we make choices. Saving a little is better than not saving at all. If you want to improve your financial well-being, make saving your first choice.
Tips to saving:
- Stash your money in an interest-bearing account, so your money earns a little money. Examples of interest-bearing accounts include savings accounts, money markets and certificates of deposits (CD). You can also look into investment accounts, but understand these come with risk. They are not insured by the FDIC and may lose value. Be sure to consult with a qualified tax or legal advisor.
- Start small. Like any habit, don’t set too high of a goal that you cannot reach. Choose to skip the coffee shop once a week and put the money in your savings instead. Skipping a $4 cup of coffee once a week can build $208 in annual savings.
- Save automatically. Setting up an automatic deposit from your paycheck into your savings account eliminates the excuses. Again, start small if you are nervous about the idea and increase as you realize how little it actually affects your day-to-day lifestyle.
2.Ask your bank about products and services that can help you improve your financial health.
Your banker is a resource of knowledge. Ask them to help you identify areas where you can improve your financial well-being, and ask for suggestions on which tools may best help you meet your financial goals. You may benefit from account balance alerts, set up in online banking, that notify you of daily balances or low balances, depending on your preferences. Or, you may want to download the SecureLOCK app to monitor your debit card expenses and set spending limits.
Questions to ask:
- Is my account earning me interest or is there a better account to meet my savings goals?
- Do you have any tips for how I can start reducing my debt and building my savings?
- What tools and services do you offer that can help me manage and track my spending?
Building a relationship with a banker will help you gain a knowledgeable resource to talk through ideas and gain insight on next steps you can take to improve your financial health. A good banker will actively listen to better understand your personal challenges and needs. Together you can build a custom financial wellness plan.
3.Prepare now for later.
If there is one thing you can expect in life, it is to expect unexpected emergencies. Too often we find ourselves in a financial pickle because we didn’t prepare for the unexpected expense or emergency. Avoid the stress and financial hardship by planning now for the unexpected car trouble, broken heat and air unit or rising inflation. By saving now, you may be able to avoid maxing out your credit card or draining your checking account.
How to get started
- Set a goal to save up $1,000 in an emergency or opportunity fund, and use the tips above to set up automatic savings.
- Keep this account separate from your daily checking or normal savings. This is an account you DO NOT touch except for emergencies.
- If you do pull money from it, pay yourself back as soon as possible. Keeping this account funded will help you manage and thrive during difficult times.
These are a few ways to increase your financial health, but they are certainly not your only options. Talk to your banker about additional possibilities. Make this your year to thrive.