Do you feel like some days you're going 100 mph?
Today's world is fast-paced and it seems like everyone's under constant pressure.
That includes financial pressure — and making sure you're covering your day-to-day expenses while remembering to save, save, save! But then life gets expensive, interest rates increase and it feels nearly impossible to be financially responsible.
Fortunately, there's help just around the corner. CommonWealth One is here to help you build those financial muscles so you can power through your days confident that you're living your best financial life.
Here are a few strategies we can help you with:
1. Manage debt
Debt is one of the biggest sources of financial stress. To effectively manage debt and gain control of your finances, it’s crucial to take an active approach:
- Assess and prioritize. Start by listing all debts, including credit cards, loans and outstanding bills. Prioritize your debts based on interest rates and payment terms.
- Create a repayment plan. Develop a realistic repayment plan that fits within your budget. Consider strategies like the debt avalanche method (paying off high-interest debt first) or the debt snowball method (paying off smallest debts first).
- Maximize debt payment. Trim your discretionary expenses or freelance for extra pocket money, and channel all your extra money to your first debt until you’ve paid it off. Then work through your list until you’re debt-free.
2. Build an emergency fund
Building an emergency fund is a crucial step in creating financial resilience. It serves as a safety net during unexpected events and reduces the reliance on credit or loans. Here’s how to build your emergency fund:
- Start small. At first, set aside just a small portion of each paycheck, even if it’s just a few dollars. Consistency is key, and we recommend you set up an automatic transfer from your checking account to a special savings account. (CommonWealth One can help you do this!)
- Aim for three to six months’ worth of expenses. While this can take time, make this amount your ultimate goal so you can weather any surprise with peace of mind and your finances intact.
3. Set financial goals
Setting clear financial goals will empower you to take control of your financial well-being.
- Identify your short-term and long-term goals. Determine what you want to achieve financially. Short-term goals may include paying off a specific debt or taking a small vacation at the end of the year, while long-term goals can involve saving for retirement or funding a sabbatical year in Europe.
- Make your goals specific and measurable. Set specific targets, such as paying off a certain debt within a specific timeframe or progressively saving toward a designated amount for a down payment on a home. This will help you track your progress and stay motivated.
- Break goals into actionable steps. Break down larger goals into smaller, manageable tasks. Each accomplishment will provide a sense of achievement which will push you forward.
4. Practice self-care
Taking care of yourself is a crucial component in reducing financial stress. Make sure to find time to pursue your interests and to take frequent breaks from the daily grind. And self-care doesn’t have to put you into debt! You can go for a walk alongside a beautiful lakefront, learn a second or third language, visit free galleries showcasing your favorite art or develop a hobby by watching DIY videos online.
Managing money responsibly in current times is super-challenging, but financial resilience is within reach. If you're ever struggling or want to talk to a financial counselor about your goals, budget, financial strategy or anything else, please give us a call or schedule an appointment. We can coach you and help get you spending and saving like a pro!
