Money Management 101
We’ve all seen those cartoons, and we instinctively know that’s not exactly a smart long-term savings strategy. Sometimes, though, it’s just easier to stick our heads in the sand and not think about money management, retirement, college tuition for the kids or someday, maybe, paying off that mortgage or those student loans.
At Dime Community Bank, we want to make money-management habits as intuitive, and unintimidating, as brushing your teeth. Because once you get into the money-management groove, you can pull your head out of that sand and enjoy a big breath of fresh air with a lot more peace of mind when your finances are working for you, rather than the other way around. Wondering how to get started? Let’s take that money out of the mattress and have a look.
Assess Your Current Financial Situation
It’s hard to go anywhere if you don’t know where you are. That means taking a good, honest look at your income, expenses, debt and retirement portfolio or other savings. How can you make this step easy? Spreadsheets might be your friend if that’s your thing, or simply make a pen-and-paper list. Once you have all of your money, assets and debt accounted for, you can start to make a plan.
Make a Financial Plan
Start dreaming — no really.
What’s your goal for your financial future? New car? Being debt-free? Making strides toward that vacation home you’ve fantasized about?
Write it down.
The first step to getting where you want to go is knowing you want to go there. The plan will be different for everyone, and if you’re having trouble getting started, a Dime Community Bank representative will be happy to help you plot out some ideas, as well as point you in the direction of the right Dime products and services to help you get there. Set some financial goals for yourself around this plan, and then share them with the contributing members of your household as necessary.
Prepare for Financial Speed Bumps
The transmission goes out. The water heater gives up the ghost. An unexpected medical bill shows up in the mailbox.
We’ve all been there, and sometimes these cringe-inducing life events can threaten to drastically derail our financial plans. If you’ve set up a smart savings plan, however, the damage a major money-management doozy can do is a lot more limited than if you just hand over the credit card and cross your fingers. The general rule of thumb is to sock away about three months of your salary in case of emergency. You’ll be glad you did. Don’t worry if you’re behind on this one, you’ve just found a great line item to add to your list of money-management goals.
One of the best pieces of advice when it comes to money management is simple: keep track of it. That means knowing where it goes, and when. If there’s something sabotaging your savings goals, a budget and careful tracking will help you find where you’re getting off track, so you can get back on.
If you’re gadget-oriented, there’s no shortage of money-management apps to help you do this. If you’re a little more low-tech, there are plenty of ways to make it easy, whether it’s getting into a rhythm with a ledger, or balancing everything in your checkbook. Our free mobile banking app and online banking services are great places to start.
Put Saving on Auto-pilot
Another money-management tip we can’t stress enough: Set up an automatic withdrawal to a savings account. Whether it’s a Money Market, Savings or Dime CD account, a Dime Community Banking can help you set up an automatic, recurring transfer so you can start saving sooner, without having to think about it.
Decide ahead of time if a percentage of your income makes sense, or if you want to squirrel away a set amount each month, and you’ll be one step ahead.
Money Management: Pro Tips
- Go Cash Only. Plan how much you’ll need on a weekly, bi-weekly or monthly basis — it will probably be easiest to schedule around your paycheck accrual. Get that sum in cash and put your debit and credit cards away somewhere safe to remove the temptation of spending beyond your budget.
- Never Pay the Minimum. This applies to all forms of debt or outstanding loans — when you get that monthly bill, do everything in your power to pay more than the minimum amount due, even if it’s as little as $10 or $20. Starting somewhere will pay off as you’re able to slowly increase that amount over time.
- Prioritize Debt Repayment. Interest rates on credit cards can be silent financial killers. Find out exactly what rate you’re paying on any and all debts (including student loans) and attack the debts with the highest interest rates first. If this means paying the minimum balance on other debts for a little while, do it. It may be the one situation we’re OK with paying the minimum.
Ready to start being more proactive about your money-management plans? Contact your nearest Dime Community Bank representative to learn more about the products and services we offer to help get you there.