Guest blog post provided by our Spokane AAU sponsor: STCU
You wouldn’t (or shouldn’t) compete for the Spokane AAU Championship Weekend finals without regular workouts. Stick to a regimen, and you’ll be in peak physical shape for moments like today.
Apply the same discipline to your financial life, and you’ll be sure to get peak performance from your dollars. Start with the fundamentals.
1. Track your spending, and look for places to save. Write down every dollar you spend for at least a week. Then look for ways to improve your habits. That might mean cutting out one restaurant meal a week, using the library to borrow books and movies, or imposing a two-day waiting period before you make unnecessary purchases.
2. Start an emergency fund. Set aside $5, $25, or whatever you can afford each week through payroll deductions or automatic deposits from your checking account. You won’t miss it.
Set a $500 goal at first. Then shoot for a month’s worth of expenses, then two, and so on. Ultimately, your emergency fund should hold six months’ pay.
Read more about emergency funds here on STCU’s financial education blog.
3. Reduce debt. Let’s say you charge a $1,200 mountain bike at 19 percent interest. Assuming you pay the monthly minimum, you’ll be paying for seven years at a total cost of $2,200.
So paying off high-interest balances ― and keeping them low ― should be your next priority, after starting an emergency fund.
4. Save for retirement. If you have a 401(k) retirement plan, set aside enough to at least get your employer’s maximum contribution. If not, then set up a tax-deferred retirement account on your own.
Some financial counselors say should be a higher priority than saving for your kids’ college education. That’s because there are more options for paying for college than for supporting yourself during retirement.
5. Maintain adequate personal insurance. Health, life and disability insurance can help you avoid financial catastrophe.
To learn more about budgeting, borrowing, saving, and spending, check out STCU’s financial education blog, “My life, my money.”