Modest (but steady) U.S. economic improvement means there’s more money to burn.
In fact, Americans saw a 4.5% increase in total personal income from 2014 to 2015, according to data from the Bureau of Economic Analysis. But the bulk (65%) still goes toward covering the basics—like housing, transportation, and food. And an additional 20% a year is earmarked for retirement and health care expenses.
That doesn’t leave much mileage for savings. But a robust savings account is one of the keys to financial health—and as of 2015, 62% of Americans had less than $1,000 stashed away for the future, according to a GoBankingRates survey.
Anything you can save is better than nothing. And with the right budget strategy, the road to better money management can be just around the corner—if you stay the course.
Clearly define your current financial landscape.
Knowing what’s roughly in your checking and savings accounts can help keep your spending in check, but drill down to the details to gain a more holistic perspective. Account for everything by using a budget worksheet or budgeting app—writing it down helps you more closely vet your monthly expenses and debts to make sure you know exactly where every dollar goes. And this applies to those impulse purchases and daily caffeine habits, too. Track it all, and take an honest look at where you stand financially today so you know where you can go tomorrow.
Design a “roadmap” to keep you on track to reach your goals.
Ask yourself: What do you want, when do you want it, and how much money do you need to get it? Whether it’s saving for that trip of a lifetime, a new set of wheels, or stockpiling money for early retirement, plotting a smart course is crucial. Take high-interest loans into account and commit to paying those down first. Scrape your budget for opportunities to trim costs and identify a realistic amount of money to save each month to help you nail those financial targets within the timeframe you set.
Hop in the “driver’s seat” and take control of your financial journey.
Your financial future is up to you. Grab the wheel and steer yourself in the direction you want to go, but feel empowered to adjust course as needed. Job relocation, marriage, raising families, and purchasing homes all affect your bottom line—but if you’re in control of your finances from the outset, you’ll have more leverage when it comes to managing contingencies later. Budgets are fluid—learn to be agile through the twists and turns. Shift money from one area to another when it’s feasible and necessary.
Don’t let the road toward a better budget fall in the rearview mirror. Check out more of Comenity’s financial resources.