Kelly’s Corner on Financial Literacy

Just like our physical health, our financial health is extremely important. And just like our physical health, our financial health cannot be improved overnight. It takes time and dedication, but the rewards are worth it! Studies have been done to prove that financially healthy people are less stressed and more productive at work.

Why is financial health important… to YOU?

Financial health is important to different people for different reasons, of course. However, most people agree that a lack of time stands in the way of improving their financial health.

We are all busy people. Whether we are busy with work, kids, or home life – I know for me, having children and running a busy banking office, I find it hard to find to even think at times. While no one is busy 24 hours of the day, we in the financial intuitions, encourage our clients to find 5 to 15 minutes per day to work on their banking. Even if you are busy most hours, what are you busy doing? Are you spending time on social media, the web or in front of a TV? If so, I want to challenge you to swap out just a little bit of the time you spend on the less important things to invest in your financial health. And the good news it will not take hours of your week.

Just like doing a little bit of exercise a day can really improve your physical health, as little as five minutes a day can do wonders for your financial health.

Commit to spending just five minutes a day to take a peek at your accounts and transactions on your mobile app, organize coupons if you have found any that day, and make sure everything is recorded in your check register.

Pick one day a week and spend an extra ten minutes, for a total of 15 minutes that day. Review every bill you have received to make sure it is correct and you know exactly when it is due. Review your check register and sign on to online banking to take a detailed look at all of the transactions that have posted that week.

Pick one day a month and spend half an hour to pay all bills, transfer money between accounts if necessary, review all account statements, balance your checkbook, and think about your goals and if your budget is on track.

It will not take forever, and you will still have plenty of time to post pictures, tweet and watch TV!

Managing a budget boils down to awareness. To build a budget, you need to know three simple things:

  1. How much money comes in

  2. How much money you spend

  3. On what you spend your money

That knowledge is key to an effective budget, and although it might not seem so at first, a budget is not the end of all fun and a big drag. In fact, a budget will allow you to PLAN for the fun and other important things in your life, and allow you to spend the budgeted amount for fun stuff with no guilt. The trick, of course, is to be aware of each dollar that you spend, so that you know exactly how much you can spend on fun stuff without it getting in the way of important stuff.

Awareness is an important part of your budget, but keeping track of how much money you spend, and what you spend it on, can be a challenge since we spend money in so many different ways.

There is no right or wrong way to pay for things… the important thing is that we keep track of where all that money is going.

So often, what we think we spend and what we actually spend are two very different things. If your budget is not quite working out, and you don’t know why, I want to challenge you to track, however you want to, every penny you spend for a week. If you want to get a true sense of where your money is going, track your expenses for a month. You might be astounded to see how much you are really spending on those ‘little’ things you don’t even budget for.

This is even more important if you have not looked at your budget in a while. Or if you don’t have a budget at all.

Once most people have a good handle on what they are spending, and how much they are spending, they start looking for ways to save money. What are some of your favorite money savings tips?

Save your loose change – 75c a day adds up to almost $275 a year

Drink water Purchasing soda and fruit punch is a waste of money. Learn to drink water with your meals and improve your grocery budget. Your health will also improve. Put the money that you normally spend on beverages into a savings account each month.

Buy in bulk Food items with a long shelf life are cheaper purchased in large packages. Buy rice, beans, grits and dry pasta in large packages. Buy household products such as laundry detergent, bath soap and bathroom tissue in bulk.

Shop with coupons Coupons help families stretch their grocery budget up to 50 percent or more. The benefits are even greater when coupons are used during sales. Coupons are essentially free money.

Buy second-hand clothing Quality used clothing can be purchased for all members of the family, reducing the clothing budget by up to 80 percent.

Purchase used furniture If your furniture is damaged beyond repair, buy used furniture for a replacement. When budgeting for a family, do not get side-tracked by large ticket items.

Avoid eating out Use the money in your budget to plan better meals at home. Learn to cook healthy and delicious meals for your family.

Avoid buying disposable plates and paper towels A family could go through several rolls of paper towels and a few packs of paper plates each week. That is simply throwing money in the trash. The cost of these items might break your budget. Use cloth napkins and plan to wash dishes each day.

Do not rent or purchase DVDs Visit the local library to borrow DVDs, CDs and books to enjoy at your family’s leisure.

Stop playing the lottery Families often waste several hundred dollars a year playing the lottery. Stop focusing on the one in a million chance of getting rich quick. Budget wisely and use your money to provide for your family’s needs.

Managing your budget is really the first step to improving your financial health. Once you know where your money is going, and you find ways to keep more of it to save, it will allow you to pay off debt faster, which will in turn provide you with opportunities to prepare for the future.

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