Staying afloat or saving up for a big life event can be overwhelming and exhausting, especially during the winter months full of holidays. But, if you can situate yourself so that you are financially stable, saving up for things no matter what the season can become an easier task. Here are some tips that can help you become financially stable this winter.
What does it mean to be financially stable?
Being financially stable means you are able to keep up with your regular payments (ie: rent/mortgage, phone bills, credit card bills, etc.) and have an emergency fund with some savings in it as well as a separate amount of money being saved to be able to retire comfortably or send a child to college or buy a house or business or even taking a dream vacation.
Tips for becoming financially stable:
- Set realistic goals, both personal and financial. Look at your savings and other accounts and decide what you want them to look like in the future.
- Find out your financial health by looking at your assets, income, liabilities, taxes, investments, and estate plans. Use worksheets such as a “spending detective worksheet” to help you get smarter about your money.
- Make a plan to meet your goals by addressing your financial weaknesses and building up your financial strengths. A great way to do this is by meeting with a financial coach who can help you see where you are at, and help you make action plans on how to get to where you want to be. Plan to compare your status and reassess things every 6-months.
- Use cash. Using plastic is just too easy. Use the old “envelope method” where you take out a certain amount of cash at the beginning of each month and keep it in an envelope where you can write your expenses right on the front. When you have to take out cash to make purchases and write those down on the envelope, you are far more likely to stay within your spending means.
- Use your bank or employer for automated savings as a way to save! Many banks or often your place of employment will work with you to set up a direct deposit system that will take a percentage right out of your paycheck and put it in a savings account. This is an easy and safe way to ensure that money goes into savings every paycheck!
- Things change – that’s okay! To help you stay on track to meet your changing goals, changing stages of your life, or changing personal circumstances, work with a financial adviser. They can be a big help in keeping you on track and helping you overcome any big changes or hurdles that may come up. Often your banks or your retirement
- Create an emergency fund. Make sure to keep it separate from your usual savings and only use it for emergencies and replace anything that you use from it. This account isn’t for an emergency “fun” shopping trip but for the times when your car breaks down, your refrigerator dies, or a job loss requires you to dip into for paying rent.
- Use mobile apps to track what you spend. Some apps we suggest are Empower (good if you like charts and graphs), Wally (good if you’re a millennial), Mint (easy and fun to use), and YNAB (good for budgeting).
Following some of these tips can help you stay on track and build a financially sound future. If you are thinking of becoming a homeowner, another way to become or stay financially stable is by taking our Homebuyer Education class, where you will receive one-on-one financial coaching and be able to learn what being a sustainable homeowner is all about. To see what else we have to offer be sure to check out www.nwwvt.org.
Author: Bailey Aines, NeighborWorks of Western Vermont part-time employee