Tips for Financial Responsibility

WHAT IS YOUR RELATIONSHIP WITH MONEY? HAS IT ALWAYS BEEN A STRESSOR, OR DO YOU LET MONEY WORK FOR YOU? Most likely the relationship you have with money is a reflection of your childhood, and that could be good or bad. Ultimately money is a means to get you where you want to go, and only your fears and traumas will hold you back. Below are some basic tips for financial responsibility, and to create safety around money.

PAY AT LEAST THE MINIMUM MONTHLY PAYMENT ON ALL OF YOUR BILLS, ON TIME

Your credit history plays an important role as it impacts everything from getting a loan to purchasing a home or car. The number one factor that influences your credit score is your history of on-time payments of your bills. Pay your bills on time to maintain a healthy credit score and save headaches down the road. For ease, automate payments or set up a calendar alert a week or so prior to the due date so you can plan accordingly.

ESTABLISH AN EMERGENCY FUND OF AT LEAST $2,000

While 3-6 months of income for an emergency fund is ideal, it’s not a realistic goal for everyone. Start with a goal of $2,000 if that’s more manageable. If an emergency situation should arise, whether it’s a last-minute visit to a sick relative or a surprise plumbing repair, you’ll be prepared to deal with the unexpected expense.

TAKE ADVANTAGE OF FREE MONEY TOWARD YOUR 401K

If you work for an organization that offers a 401K and they’ve agreed to match a certain percentage of your contributions, contribute at least that percentage. (Most companies will match up to 5%) It’s a guaranteed return on your investment, so get on board!

PAY OFF CREDIT CARD DEBT

If you have credit card debt, pay it off as quickly as possible. If you debt is between $0 and $3,000, and add an extra $50/month to your minimum monthly payment. If your debt is between $5,000 and $10,000, add and extra $100/month. If it’s over $10,000, add an extra $150/month. Depending on your interest rate, you should have that debt paid off in 3-5 years and you can breathe a sign of relief!

SPREAD “EXTRA” MONEY ACROSS YOUR SAVINGS AND PUT IT INTO THREE MAIN BUCKETS: EMERGENCY FUND, NEAR-TERM NEEDS, AND RETIREMENT SAVINGS

Consider increasing your emergency fund beyond the $2,000 and put a third of your “extra” money there. Then, put another third toward nearer-term needs such as school or a car down payment, and put the final third toward resavings (401K or IRA).

©2014, 2016 Integrative Nutrition, Inc. | Reprinted with permission