By: Race W. Wilson, Lewisburg Branch Manager
If we’ve learned anything over the past two years, it’s that life can be unpredictable. April is Financial Literacy Month, and I’m sharing four ways you can improve your financial intelligence to help prepare yourself for the unexpected.
Write Down Your Budget
Developing a written budget is the best way to help you gain a big-picture perspective of your financial situation. Once you have an aggregate view of your monthly expenses in hand, it becomes easier to prioritize between wants and needs and trim down on unnecessary expenses.
While budgeting, it’s wise to assign a role to every dollar to help eliminate overindulging in impulse purchases, but you also want to be realistic and leave room for some discretionary spending. As you’re working to establish a new financial plan, keep in mind that consistency is key.
Check Your Expenses Regularly
If there’s one thing I can’t stress enough, it would be to check your bank statements and track your expenses. In the new era of Venmo, Google Pay, and Apple Pay, it’s far too easy to spend on a whim and lose track of your expenses throughout the day.
One tool that can be extremely helpful in this endeavor is First Farmers’ Money Management dashboard. This tool allows you to track your purchases and identify where you’re spending the most. I’ve found this resource extremely beneficial to many of my customers because it’s easy to lose sight of where your money is going. Knowledge is power, and using handy resources to track your expenses regularly can be highly effective in helping you create and stick to a budget.
Establish an Emergency Fund
It’s vital to have an emergency fund in case you find yourself in a tight financial situation. Whether it’s an abrupt increase in fuel prices, a medical emergency, or an unanticipated maintenance repair, these expenses can leave many individuals feeling frantic and unsettled. While these situations can feel daunting at first, having an emergency fund in place can help offset the initial impact of unexpected expenses.
For that reason, I would recommend having a benchmark emergency fund of at least $1,000 in place. If you don’t have many expenses or debts, it’s a great idea to increase this number and grow this fund over time. These savings allow you to keep things afloat during tough seasons until things calm down. When faced with unexpected expenses, it’s essential to revisit your budget to see what adjustments can be made to accommodate the additional costs. Visualizing the whole picture of your finances can inform your decision-making process and grant greater peace of mind.
Ask for Help
When it comes to managing your money and taking care of your responsibilities, there’s no such thing as a dumb question! If you’re not sure how to set money aside and create a budget that sticks, don’t hesitate to ask a relative, friend, financial advisor, or banker. If you need help, the First Farmers team would love to speak with you and help create a personalized plan for achieving financial success.
Life is far from predictable. That’s why it’s always helpful to have a financial plan in place. While these tips will certainly set you on the right track toward improving your financial literacy, recognize that getting into healthy financial habits takes time and practice. And, remember to have patience with yourself throughout the process.
