No matter your age or stage in life, it pays to know the facts about personal finances. When you understand the basics, you can set yourself up for success and build a healthy financial future. Here are three facts to know about personal finance to get on the right track.
Fact #1 – Good Financial Habits Pay Off
Making it a habit to set aside money each month helps you save to meet both short and long-term goals. For many of us, the big savings goal is purchasing a home, and eventually retirement. But people also save to build up an emergency fund, afford a new vehicle, education, and more.
Making regular deposits, no matter how small, will add up over time.
Besides setting aside money and ensuring your funds earn a competitive rate of interest, the second most important habit is to control spending. By budgeting wisely, you not only set aside more money for potential savings, but you also develop spending habits that serve you in the long term.
Fact #2 – There’s a Smart Way to Manage Debt
Many people find it helpful to understand the facts of managing debt wisely. For example, making only the minimum payment each month on a credit card extends how long it takes to wipe out your debt and adds to the amount of interest you pay. Minimum monthly payments can be a short-term approach to dealing with financial challenges — because you are keeping up on bills — however, making more than the minimum payment each month helps avoid digging yourself into a financial hole.
If you’ve hit the maximum balance on credit cards, or run into issues keeping up with other debt, it is time to take a hard look at where your money is going and make a plan to change any habits that are not beneficial to your financial health.
Fact #3 – You Don’t Have to Go it Alone
There are times in life when you might need to get a handle on high credit card balances, understand options when facing financial challenges, or figure out how to get a healthier credit score.
A financial counseling session with our partners at GreenPath Financial is a good first step. Not only will the counselor help you understand your full financial situation, but they will also help you to develop a customized plan for your unique situation.
Adapted from an article distributed in partnership with GreenPath Financial Wellness.