Develop the roadmap to make your dreams a reality
Did you know that your long-term financial health is determined more by your planning and saving than by how much money you make? Here are some recommendations to help you make the most out of your current financial situation.
Set goals based on what you need and when you need it
Think about your short-, medium- and long-term goals. In the short-term, you may want to make sure you have an emergency fund set aside so you aren't running up your credit card balances. In the medium-term, you might have a goal of paying down all of your credit card debt. For the long-term, you may want to retire without having to live with your children.
Give power to your goals by labeling them
One of the best ways you can keep your future hopes top of mind is by labeling your saving or investing accounts. For example, it's harder to take money from "Sally's College Fund" than account #6789. Conversely it might be easier to pass up eating out for a month when the money is going to the "Hawaiian Vacation" account. Once your goals are set, figure out how much you need to save each month to reach them. Start small and automate how much you want to save each month-then embrace tomorrow's benefits by planning today.
Take stock of where you are
Setting goals is the critical first step. Then what? Think of it like you would your physical health. You might step on the scale, check your cholesterol or have an annual physical. The idea is the same-you need a way to measure your progress and your net worth. Simply put, take everything you own and subtract everything you owe. For example, if your credit card balances are high and your savings balance are low, then you're moving backwards and your financial health could use a workout.
Protect your assets
Planning for the unexpected is just as important as setting your goals. Life happens-and it can wipe out your savings and disrupt your careful planning. Insurance is the best defense for situations out of your control. It can be complicated to understand what kind of insurance is best for your lifestyle, but Patelco can help with a free yearly insurance check-up through a licensed professional.