Financial Education

December 20, 2021

As we all know, life can be unpredictable. One of the best ways to turn uncertainty into a benefit is planning ahead with smart financial decisions.

PeoplesBank introduces six personal financial planning tips you can complete right now!

1. Create an Emergency Fund

Could you afford a significant, unexpected event like a hospital stay, a major car repair or unemployment? If not, you might want to start saving for that potential rainy day. Establish an automatic, recurring transfer from your checking to savings with the goal of saving the equivalent of three to six months of living expenses. An emergency fund of this size can help prevent the need for taking out a loan when you go through hard times.

Building your emergency fund is easier when you can deposit a consistent amount of money each time. Some top financial tips for creating and sticking to a savings habit include:

  • Create a goal: Setting a specific plan will help you stay motivated, especially when you’re just starting your savings habit.
  • Set up recurring transfers: Setting up an automatic transfer allows you to automatically move money into your savings each month for a low-effort way to save.
  • Regularly check your savings: Monitoring your progress can help put your efforts into context and encourage you to keep going.
  • Celebrate your success: After reaching your savings goal, finding ways to treat yourself will motivate you to create and start your next one.

2. Check Your Credit Report

Have you checked your credit report recently? By following this top personal finance tip, you can confirm that all the credit bureaus’ information on you is accurate. Inaccurate credit reports can result in a lower credit score and potential disqualification from loan applications. You can instantly get one free credit report per year from each of the three major credit bureaus by visiting www.annualcreditreport.com.

3. Rebalance Your Portfolio

Are your investments on track? Annually rebalancing your portfolio helps ensure your investment portfolio has an appropriate mix of investments for you. A financial advisor can review all of your investment accounts — IRAs, workplace retirement plans, investment accounts and college savings plans. Together, you can make a plan to rebalance your investment mix to match your goals, timeline, and risk tolerance.

4. Reevaluate Your Fixed Expenses

When an expense deducts from your account automatically, it’s easy to forget how much money you’re actually spending. But whether it’s your internet, gym, car insurance or cellphone bill, there may be cheaper alternatives out there. Shop around and see what competitors are currently offering. Then, try speaking with your current providers to see if you can avoid the hassle of switching and simply lower your current payment. It may surprise you that many will offer a better deal when they understand your situation and willingness to repay with a better structure.

Another way to re-evaluate your fixed expenses is by determining your survival number. This number is all the monthly costs of bare-minimum essentials such as rent, food and health care. While finding this number doesn’t mean it becomes your new budget, this knowledge will help you become more intentional with your spending and financial goals.

5. Set Financial Goals

Not setting a financial goal is like driving with no destination. You might get there eventually, but it’s much quicker to set a straight path from A to B. By establishing a few financial goals today, you’ll set up a financial future you’ll be happy with, and you’ll get there quicker. Be as specific as you can, such as having a monetary amount for the goal, a date you’ll reach it and a method for how you’ll save enough money.

Setting financial goals doesn’t have to be an intimidating process. With these financial wellness tips, you can set and reach your goal with ease:

  1. Find inspiration for your goal: Attaching a specific reason for your plan can help you put it into perspective increase your motivation.
  2. Look at your current situation: Examining your current financial situation can set you on the right path and identify whether your goals are long or short-term.
  3. Set specific goals: A strong foundation for any financial plan relies on creating specific goals with an achievable timeline.
  4.  Write down your goals: After identifying what you’d like your goal to be, write it down to keep your plan clear and organized.
  5. Treat yourself: While making goals is important, it’s also essential to reward yourself for making progress toward completing them.

6. Set Up Banking Alerts

If you don’t check your account balances regularly, you may be missing an opportunity to be more intentional with your spending and saving. Creating and using any financial notifications may help you spot expenses you didn’t know about, such as subscription services.

Contact a PeoplesWealth Advisor Today!

Need further assistance? Looking for more financial moves you can make? Have questions on anything mentioned previously? We’re here to help.

Whether you’re creating an emergency fund or need assistance rebalancing your portfolio, PeoplesWealth Advisors are here to help. If you would like assistance creating and reaching your financial goals or would like to learn more financial tips for young adults, you can contact our financial mentors.

Investment products: Not federally insured.

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