By Tina Mason
What would happen if you suddenly had a $1,000 emergency expense come up? If you would have trouble covering it, you wouldn’t be along. Half of Americans say they would experience hardship if that situation were to come in the next 30 days.
A big part of it comes down to financial literacy – understanding how to manage your money effectively, including planning for the future – and the idea that it should be part of the education our kids receive in school. In fact, almost two-thirds of adults feel that, aside from math, English, and science, financial education is the most important subject that should be part of graduation requirements. They rate money management skills above understanding the dangers of alcohol and drugs, good health and wellness habits, and safe driving practices, and the overwhelmingly believe mandated financial education would help address many of the social issues the country faces.
The problem is that most school systems don’t deliver the education. In fact, only six states currently require high school students to take a standalone personal finance course.
Fortunately, community banks can be a great resource for all your financial needs, and can provide helpful information and resources – like The Milford Bank’s Learning Center, which provides educational resources on a variety of personal finance topics, including:
• Managing your spending and saving strategies
• Debt management
• Buying or selling a home
• Paying for college or other major life events
• Retirement planning
If you’re among the half of Americans who would have trouble managing an emergency expense, there are a few easy ways for you to get a better handle on your finances.
Start an emergency fund – Your ultimate target should be enough to cover 3-6 months of expenses, but that could take time, so start with a smaller goal, like being able to handle that unexpected $1,000 expense. You can even use online tools like Plinqit to help automate your savings. Here’s some more helpful information on how to start or add to your emergency fund.
Create a budget – Whether you’re looking to start an emergency fund or simply trying to cut spending a bit, having a monthly budget can be a huge asset. Your budget will help prioritize your spending and show you where you’re spending more than necessary on non-essential items (like multiple streaming services you may not be using much). Revisit your budget regularly to see where you can save even more.
Create a long-term financial plan – Whether you’re a recent graduate or have been in the workforce for years, knowing your goals for the future will help you understand your financial needs, and then develop plans for reaching those goals. Whether you’re planning on starting a family in the future, buying your first home, buying a vacation home or a boat, or making sure you’re set for your retirement years, you need to plan ahead.
Don’t go it alone – Unless you’re a financial expert, there’s no need to try to figure it all out on your own. We have professionals who are ready to answer your questions and help you develop your short- and/or long-term financial strategies. Just like you would hire a contractor to remodel your home, work with a financial expert to remodel your finances.
While there is so much uncertainty in the world, especially today, your finances are under your control. Making sure you have the information you need to make the most of your money will be a key to your long-term success.