The people who worry the most about money are … most people. Whether you have a lot, a little or you’re somewhere in between, concerns often linger about such money issues as having enough income for retirement, being able to cover emergency expenses, staying afloat following a job loss and making wise decisions about using the income and savings you have. To help ease your mind about your money concerns, the following tips will help you address some of your top financial stressors.
Make Wise Financial Decisions
If you’re lacking skills and experience in making good financial decisions, there is a fix for that. Online you will find a number of money management courses that can train you in how to budget, manage your money, control spending, invest and make wise financial decisions. As well, many local investment firms offer free courses in money management and investing, as do some banks and community organizations that are devoted to financial literacy.
Prepare for Loss of Employment
Fluctuations in business markets and in the economy overall can turn what once seemed like permanent employment into sudden job loss. When this happens, what can you do to stay afloat and sustain your lifestyle until you find a new job? Start by paying yourself first by saving 10 percent of your income – until you have six months’ worth of income saved. This is a standard rule for having money to live on in case of sudden job loss.
Set Aside Emergency Funds
The next important thing to plan for financially is the next emergency. An emergency expense may be suddenly needing a new car or replacing a major appliance that breaks down. Because these concerns make such a big impact on your budget, it’s important to have at least $2,000 saved at any given time to accommodate an emergency. Pay yourself first out of your current income or trim your spending as you would to save for any other important goal.
Save Enough for Retirement
Because some of your living expenses actually go down during retirement, you should plan on needing about 80 percent of your current income level to maintain your lifestyle. After considering all of your various retirement income sources such as Social Security, 401K, investments and pension, meet with a retirement planner or use an online tool to determine how much more income you’ll need. Then, make sure you’re taking advantage of retirement benefits offered by your employer (such as matching contributions), and save and invest small amounts on your own over time to meet your goal.
Additionally, if credit card debt is a major concern for you in managing your money, be sure to read our blog about the Top Five Things to Know about Credit Card Debt. As well, the professionals at Donohoo Accounting Service are here to help you manage your finances. We have been helping people like you to wisely manage their finances for more than 20 years. For a free consultation, call us today at 513-528-3982.