Financial Fitness
Why is it such a challenge to remember what we spend? We don’t write it down in the context of everything we spend. One day we go out for an expensive meal and the next day we order a gift for a loved one. Then a statement arrives and we can’t believe we have spent so much money. The very convenience of credit and debit cards can be used against us. Recording each purchase is the answer.
What is an emergency fund? It is money that is set aside in advance that you can rely upon later. Typical emergencies may include the loss of a job, unexpected or non-covered medical expenses, or emergency car repairs. Most financial planners recommend three to six months’ living expenses be set aside. If a consumer buys something on a credit card and can’t pay it off that month, an eye should be kept on the amount of debt accrued. Turning to an emergency fund instead of to a credit card gives you the freedom to stay ahead of your bills and in charge of your spending.
Are you saving with a specific goal in mind? Without setting a clear goal, the money actually saved to reach the goal is often less than is required, or it’s not available at all. Think of something that you waited a longtime to purchase. The more detailed that picture was, the more you could see yourself with that item. Saving with a goal in mind makes the satisfaction of achieving that goal all the more real.
Health costs keep going up. One way to lower them is to take full advantage of any flexible spending account your employer may offer. This account allows you to use pre-tax dollars to pay your portion of group-sponsored insurance premiums, and even set aside pre-tax dollars to meet out-of-pocket medical and dental expenses such as deductibles and co-payments.
