Start an “emergency fund”
An emergency fund is your financial safety net. Without it, any unexpected expense, such as car repairs or a medical bill, can throw your budget into a state of chaos.
Financial planners generally recommend having between three and six months’ worth of basic living expenses in your emergency fund.
This figure may seem unrealistic (particularly if you’re already having trouble making ends meet), but it’s okay to start small and grow your emergency savings from there.
Even a few hundred dollars can make a huge difference in your greatest time of need..
Employ a budgeting app
Budgeting apps make the process of organizing your cash flow as simple as it can get.
For example, Mint, a free budgeting app, allows you to connect your bank and credit card accounts and neatly categorizes your expenses.
You can set (and track) goals and create alerts for big transactions, exceeding the budget, and more.
Creating a budget and making sure your expenses don’t outpace your income can take a few hours.
But once you’re done, all you need is to check it regularly to make sure you’re staying on track.
That said, you can always adjust your budget if your financial situation changes — for example, if your income increases or you take on a new debt obligation.
Check your credit score
Your credit is another essential part of your financial life.
It affects whether you can get approved for credit cards and loans — from a car loan to a mortgage — and at what terms.
It can also play a role when you’re applying to rent an apartment or even for a job.
Set goals
Whether you’re saving for a down payment or your next vacation, let your goals inspire you and help you stick to your budget.
Maybe you’re trying to become debt-free, open a business or increase your income.
Consider which goals you can achieve in the short term and which ones require a longer game plan.
Brainstorm the steps you need to take and let them dictate your financial decisions.
Thoughts
Today lays the foundation for getting started. These are all things you can do at this very moment to improve your personal financial health.
Tomorrow I’ll dive into the next steps, the path(s) to building longevity that you’ll thank yourself later in life for laying that foundation in your younger years!