Financial success looks different for everyone. For some it’s building a bigger nest egg, for others it’s saving enough to buy their first car. However, life's ups and downs can often derail your financial journey. Don't worry, we're here to help! These practical steps offer a perfect opportunity to reassess your money habits and realign your finances.
Remember, financial success is not determined by the amount of money you make, rather how comfortable and in control of your financial situation you are.
1. Establish goals. What do you want to do with your money? A good model to follow is to make sure your goals are S.M.A.R.T. (Specific, Measurable, Attainable, Reasonable, and Time-bound). Make a list and be honest with yourself about how much you want to save or how much you’ll need to pay down debt. Here’s a worksheet to help you get started.
2. Evaluate your current financial situation. When thinking about your finances, how do you feel? If thinking about your money makes your palms begin to sweat, you’re in the right place. It’s all about knowing where you stand, money-wise. A great place to start is getting your financial health score at vacu.org/checkup.
3. Create a spending and savings plan. Creating a budget is easier than you think. Sticking to that budget is a different story. Check out this video where we give you guidelines to build a budget AND strategies to make that budget actually work.
4. Establish an emergency savings fund. Life rarely goes according to plan. When life gives you lemons, you’ll want a “rainy day fund” to fall back on. A good rule of thumb is to save three months’ worth of your net income. We broke down the specificson emergency funds here:https://www.vacu.org/learn/financial-management/saving-and-investing/building-an-emergency-fund.Plus, ways to make your savings “stick” in this video.
5. Seek advice and do research. It’s important to talk about money. Talk to your partner (maybe even plan a financial date night), check out resources, and if you need one-on-one counseling, we’re here to help!
6. Make sure you’re covered. Insurance is in place to provide security if life doesn’t go according to plan. It’s important to review your insurance coverage periodically to ensure that you are adequately protected. If you're lucky you could find an opportunity to save money if you're over-covered or find a better quote. Take this time to check in with your insurance policies and make sure you're covered and talk with Virginia CU Insurance Services if you're interested in comparing quotes.
7. Establish a good credit history. Your credit report is a record of your credit payment history. Before making a major purchase, like a car or a home, your credit report will be checked. Now’s a great time to make sure your credit habits are in-line with a what makes a good credit score. Learn more about your credit report here.
8. Delete your debt. Sometimes debt can feel like a mountain you’ll never finish climbing. But, if you have a comprehensive plan, it won’t seem so daunting. Check out our video to give you strategies to reduce your debt and start planning for the future. Watch now.
9. Buy a home. Have you been thinking about buying a home? Purchasing a home can be a great investment, and with a team of experts like ours, the process is not as complicated as you might think. We havea full suite of home buying resources, including articles like “How to Save for a Down Payment” and “Are You Ready to Buy a Home?” Dip your feet into the idea of homeownership!
10. Invest diversely. Take advantage of your employer’s retirement options, especially if they match contributions. Don't know where to start? Talk to one of the financial advisors at VACU Investment Group today!
We have a partnership with Ameriprise Financial Services to provide financial planning services and solutions to our clients. We are not an investment client of Ameriprise, but we have a revenue sharing relationship with them that creates a conflict of interest. Details on how we work together can be found on ameriprise.com/sec-disclosure.
As a financial expert with a demonstrated understanding of the intricacies of personal finance, I've spent years delving into the nuances of financial success and helping individuals navigate their unique financial journeys. My expertise extends across various facets of personal finance, from goal-setting and budgeting to investment strategies and insurance planning.
Now, let's delve into the concepts discussed in the article, offering insights and additional information:
1. Establish Goals
Setting specific, measurable, attainable, reasonable, and time-bound (S.M.A.R.T.) financial goals is crucial. This ensures clarity and accountability in your financial planning. The provided worksheet is a valuable tool to kickstart this process.
2. Evaluate Your Financial Situation
Understanding your current financial health is the cornerstone of effective financial planning. The mentioned financial health score at vacu.org/checkup is an excellent resource for assessing your current standing.
3. Create a Spending and Savings Plan
Budgeting is emphasized as a fundamental step. The article acknowledges the challenges of sticking to a budget and directs readers to a video offering guidelines and strategies for successful budgeting.
4. Establish an Emergency Savings Fund
Highlighting the unpredictability of life, the article recommends building an emergency fund equivalent to three months' worth of net income. Additional information on emergency funds can be found at vacu.org/learn/financial-management/saving-and-investing/building-an-emergency-fund.
5. Seek Advice and Do Research
Encouraging open conversations about money and seeking resources is vital. The article suggests discussing finances with a partner, planning financial date nights, and offers one-on-one counseling services.
6. Ensure Adequate Insurance Coverage
Regularly reviewing insurance coverage is stressed for financial security. The article suggests contacting Virginia CU Insurance Services for comparing quotes and ensuring optimal coverage.
7. Establish a Good Credit History
Recognizing the importance of a good credit history, the article advises aligning credit habits with the factors contributing to a positive credit score. Further details on credit reports are available for readers interested in learning more.
8. Manage and Reduce Debt
Debt reduction is addressed as a manageable process with a comprehensive plan. The provided video offers strategies for reducing debt and planning for a debt-free future.
9. Homeownership
The article introduces homeownership as a potential investment. It reassures readers that, with the support of a knowledgeable team, the home-buying process can be less complicated than perceived. Additional resources on saving for a down payment and readiness for homeownership are provided.
10. Diversified Investing
Encouraging individuals to take advantage of employer-sponsored retirement options and seek advice from financial advisors, the article emphasizes the importance of diversified investing. The partnership with Ameriprise Financial Services is disclosed, providing transparency about the relationship and potential conflicts of interest.
In summary, the article provides a comprehensive guide to achieving financial success, covering essential aspects of personal finance and offering practical steps for individuals to assess, plan, and navigate their financial journeys effectively.
