[vc_row][vc_column][vc_column_text]Quick. Right now. If something were to happen—a car breaks down, an unexpected vet bill, the Nordstrom Anniversary sale—would you be able to take care of it without using credit? If you are one of roughly 62% of American who have $1,000.00 or less in their savings account, you are probably already aware how difficult it can be to stretch for large purchases (including those shoes), unexpected bills, and let’s not even mention your retirement. To make matters worse, cost of living in Charlotte has increased. The average house in Charlotte now cost’s an average of $188,900, and our income growth has not kept pace. It’s enough to send anyone to the sale section for a consolation purchase. Can’t get a house, but check out my new whisky glasses.
But before you click over to Nordies, consider this: financial freedom is a game of small steps, not one big one. Much like any lifestyle change (inward groan), we have to make small movements for long term goals.
First step is simple: Know where your money is going. Separate out your fixed expenses (monthly debts combined with annual debts, divided into twelve months) from last month’s extra’s (the morning coffee, restaurants, and yes, those shoes). Combine the total expenses and compare that to your monthly income. How does that look? Frightening? Having heart trouble? Or about what you expected? Either way, you can take this information and….
Second: Set a budget. And not one in your head. Turns out, we’re really good at pretending to have a budget and then basically shoving it behind mental tasks like Candy Crush. Reduce the impact of surprise bills and plan ahead for fun purchases, by making a budget and revisiting it regularly. A good rule of thumb is to revisit your previous month’s budget at the first of every month. This keeps your financial goals and how to get there, front and center.
Step three: Find ways to save. Here’s where you can get creative. Something as simple as turning out the lights when leaving a room can make a difference in those recurring monthly expenses. Other ideas include: changing all your lightbulbs to energy efficient ones, and turning off your HVAC and water heater if leaving for more than two days. Commit the projected savings to an emergency fund.
Four: Commit to automatic savings. In other words, pay yourself first. It is easy to forget to transfer money, so set up automatic savings and transfer any additional money on top of this amount.
Finally, Pay off debt. Barely half of Americans have enough cash saved to cover their credit card debt. “Even though some debts like mortgage or student loan debts are considered “good” debt because they are investments, credit card debt is seen as a problem for many Charlotteans,” says _____ of _____. (was uncertain of this quote)
Like any long-term change, where we are today decides much of where we will be tomorrow. Change your financial future by following these five steps today.