Did you know National Financial Awareness Day is Tuesday, August 14? If not, don’t worry. Apparently, it has only been around since 2015 but that doesn’t make your finances any less important!
National Financial Awareness Day encourages consumers to protect their financial security, and at Dallas Capital, we call that a cause for celebration.
So, how can you join the party?
- Analyze Your Finances
How can you know what to do if you don’t know where you stand currently? Regardless if you make $50,000 each year or more than $500,000, it is important to understand your financial health.
Keep track of your expenses for a month to analyze which areas you can improve. Regardless if your goal is to get out of debt, build an emergency fund, buy a house, go on a vacation or prepare for retirement, it is easier to plan once you understand where your money is being spent.
- Develop a Plan
At Dallas Capital, some of our clients need to save, while others need to invest. Ultimately, most are just trying to grown their wealth – no matter their specific definition of what that entails.
Our first recommendation will always be to reduce your debt. Whether refinancing your mortgage or consolidating credit card debt with a personal loan, decreasing a debt burden is often the key to financial success.
You also need to eliminate losses you might not notice, such as banking fees. Many checking and savings accounts require you to maintain a minimum balance or else you must pay a monthly fee. Ask a Dallas Capital banker for an “account check-up,” and we can help you save money and maybe even add some new perks!
However, even if you don’t have debt or banking fees, you need to set a savings goal and begin to reduce your expenses. An old standard is the 50-30-20 rule, which states 50% of your income should be dedicated to essentials, such as food and your mortgage/rent, while 30% should be allocated for discretionary spending, such as entertainment. Meanwhile, 20% should be earmarked for savings. This is not a hard-and-fast rule, but it is a good guide to help you map out your plan this National Financial Awareness Day.
- Track Your Progress
Once you begin to execute your financial plan, be sure to check to see if you are following it each month. It can be easy to justify getting off track – such as overspending on a home in this tough North Texas market – but if you stay the course, you’ll set yourself up for long-term success.
Plus, financial planning is important because challenges can quickly arise. Losing a job or the death of a loved one can throw your financial planning into turmoil, but those who plan properly will be able to more easily handle life’s unexpected events.
If you have any questions, please contact our Banking Center today. Or, if you are a business owner at heart, start preparing for World’s Entrepreneurs’ Day that is right around the corner!