Tip of the Week

Building your financial future can be like building a house. You need a “blueprint” or a plan in order to have a sound foundation.

Create a budget

Creating a budget needs to be your foundation. After all, a house without a foundation won’t stand upright very long. Make sure you account for all your income each month and make a list of your expenses.

Mapping Your Future provides a budget calculator and there are free budgeting apps. Or you may just want to set up your own spreadsheet – make it as simple or as complex as you prefer. The key is to be realistic about your budget and know that you will have to adjust it from time to time. Oh, and don’t forget to budget for some “fun” too – within reason that is.

Save for the future

Don’t forget to “pay yourself first” every month by transferring some money to your savings account. You can start small and increase the amount as your earnings increase. For some, a savings account has a goal associated with it, such as money for a downpayment on a house. You might want to have a special savings account for things such as vacations, concerts, and hobbies.

While none of us like to be told our car needs a major repair or find that the hot water heater needs to be replaced, so make sure to have an emergency fund for those “unexpected” surprises.

Use credit wisely

You may have heard the saying – “If you can’t afford it, don’t charge it.” Responsible spending and avoiding debt come from only buying items you can pay for with cash and not through credit. If you do charge things, make sure to pay off your credit cards in full each month.

Track your spending

A debit card doesn’t mean free reign on spending either. Make sure to track transactions in a check register so you know how much money you have in your bank account. And don’t forget to reconcile your account when your bank statement is available.

Plan for retirement early

Many young people may think investing is something you do as you get older. Remember, you can never start investing too early in life. The earlier you start, the more money you will have available for retirement. Many employers offer a retirement plan, such as a 401(k). Make sure you take advantage of any “employer match” that is available as it is a great way to build that fund.

Seek financial advice

Lastly, don’t think you have to tackle investing on your own. In fact, it is recommended to utilize a financial advisor to get you on the right track when you want to start investing.

– By Marlene Seeklander

Mapping Your Future provides these tips that you can share with your students during Financial Literacy Month. You can find more resources on the Mapping Your Future website.