Tips To Build a Strong Financial Foundation

Sound financial advice can be like a trusty map, helping guide you down the path towards financial freedom. Here’s some of our tips to set you up for success.

Saving money can help you build a stronger financial foundation.

Some people are natural savers, and some are natural spenders. Regardless of which side of the fence you stand, learning regular savings habits, big or small, can help set you on a path towards building your financial foundation. While a good rule of thumb is to save 10% of your paycheck, that may not always be feasible. If you are new to saving regularly, start with putting $25 of your paycheck into your savings account each pay period. Once you become comfortable with that amount, try increasing it a bit and watch it grow. We can even help you set up automatic transfers within your accounts to make this step simple!

Build a realistic budget and stick to it.

If you’re new to budgeting, it can sometimes seem a bit overwhelming but don’t be deterred! Start small by making a list of all of your monthly expenses, such as your housing expense, car payments, cell phone bill, groceries, etc., and add them up. Does your monthly income sustain your monthly expenses? If not, take a hard look at whether all of your expenses are really necessary. Could you save a little bit by grocery shopping and cooking at home, rather than eating out? Maybe you could renegotiate your cell phone plan for some hidden savings.

Here’s a rough idea of how your monthly income should be spent:

• 50% of your monthly take-home pay should be spent on needs (rent/housing, food, utilities, etc).
• 30% of your monthly take-home pay could be spent on wants (eating out, entertainment, etc).
• 20% of your monthly take-home pay should be spent on savings and any debt repayment you might have.

Continue to check in with your finances.

Jobs change, people move, families grow, and the cost of living continues to change. Once you’ve built your budget and established some regular savings habits, continue to monitor your income and expenses, and set goals for the future. If you’re renting, maybe you want to think about buying a home. If you’ve recently graduated school, how do you afford a new car while also paying student loans and your regular monthly expenses? Maybe you welcomed a new baby into the family and need to think about saving for their future. All of this can be attainable with thoughtful planning, a savings mindset, and the right financial advice to lead you down the trail. Montana Credit Union employees are experts in their field and prioritize member service. We are here to help you achieve your financial goals!