Money might not buy happiness, but few things can be as distressing as finding yourself with insufficient funds to cover your basic household expenses.
According to a 2018 Federal Reserve survey, more than 40 percent of adults faced with a $400 unexpected expense would either not be able to pay it or would do so by selling something or borrowing money.
We’ve spoken a lot about financial health and smart money management in this column, but there still is more work to be done. Last month, State Treasurer Allison Ball announced plans to launch Kentucky’s Financial Empowerment Commission. The commission will provide support – through private donations – for educators teaching the new, state-mandated financial literacy program required for high school students beginning in 2020. Fort Knox Federal Credit Union is proud to be one of the key sponsors of the program.
Ensuring that high schoolers enter the job market with a firm grasp of financial management is important, but what about the rest of us? What can we do to take control of our finances today?
1. Take time to learn. For most of us, money management was not taught in school and might not even have been discussed openly at home. The last thing parents want to do is stress their children out by talking about money issues. Today, there are many online tools available for free to help us learn about our options. For example, the financial fitness center on the credit union’s website includes dozens of interactive modules on everything from building emergency savings to retirement planning.
2. Know where to turn. If something seems too good to be true, it probably is. This wisdom holds true when it comes to “fast cash” offers with no credit checks. Don’t mistake ease or convenience for a good deal. Be sure to read the fine print and consider an organization’s mission. Is it a for-profit financial institution or is it a not-for-profit, member-owned institution focused on helping people?
3. Focus on the long-term. This might not always be easy, but the decisions you make today can have a big impact on your future. Improving your financial health is a long-term process and might mean delaying big purchases or choosing lower-cost options to ensure you have money to cover life’s unexpected expenses and save for the future. If you already have multiple loans or are paying a lot in interest each month, consider consolidating debt to lower monthly payments and reduce overall interest expenses. Think about your ultimate goals and what it will take to achieve them.
Taking steps to ease financial stress today can pay huge dividends down the road. Smart money management can help us handle life’s curve balls and provide us with the freedom to pursue our dreams. Whether that means buying a home, retiring early, starting your own business, or trying something else entirely.
Together, we can ensure that our children are better prepared to handle their finances as they become adults and that we’re taking the right steps to prepare for our own futures. Here’s to another year of making a difference in the lives of all Kentuckians.