Did you know financial fitness can save your life? Well, maybe not literally. But being well informed about money can reduce stress and help you and your family live a healthier and happier life. Here are three tips to get your started
The U.S. has one of the lowest personal savings rates amount the world’s economically developed countries.
As of this year, people in the U.S. have saved less than 5% of their disposable income, on average, according to the U.S. Department of Economic Analysis. While that number has undoubtedly increased over the last few years because of hard lessons learned during hard economic times, Americans as a whole still need to save more.
Saving money is crucial to financial well-being. Savings can help you cope with financial emergency, make a major purchase, and even get ready for retirement.
Saving is easier if you start early and make a habit of it. One good practice is to sign up for an automatic savings plan that deducts money from your paycheck or checking account and sets it aside before you have a chance to spend it. Stash your savings in a savings account, certificate of deposit (CD), investment account or retirement account to meet your future needs.
Only 40% of adults have a budget and keep close track of how much they spend on food, housing, entertainment and other categories, according to a survey conducted for the nonprofit National Foundation for Credit Counseling.
Approximately half of the adults surveyed said they had a good idea of how much they spend or tried to stay within certain limits. 7% had no idea and no set limits. A budget is an important toll to plan and track how much you’re spending and saving each month. To make a budget, start with your monthly income and then allocate specific amounts for each expense. Try to set aside at least 10% for savings, and no more than 30% on housing, 25% for living expenses and 15% for transportation.
Nearly 70% of young adults have a credit card and 64% worry about their debts at least occasionally, according to a survey conducted for the National Endowment for Financial Education.
Paying credit card bills and other debts on time is essential because a history of on-time payments strengthens your credit score, which measures your overall creditworthiness. It’s much better to build you credit record slowly and patiently than to take on more credit cards than you can handle or spend more than you can repay.
Strive to learn more about savings, budgeting and using credit responsibly, especially credit cards. Learn to improve your financial literacy, which will, in turn, help you to achieve your goals, both financially and personally.