Get on Track with Managing Your Money

Why is it important to manage your money well? It is one of the biggest ways we can gain financial independence. This translates into taking control of your money – what you earn, save, and spend. While we don’t need a lot of money to be fi­nancially independent, we do need to know how to manage it and make it work for us.

The following are a few steps to reaching financial indepen­dence:

• Make a list of your values. What is important to you? Once you write down all the things that are important to you – place your values in order of importance. Your list of values may include becoming financially inde­pendent, having a healthy savings and 401K plan by a set deadline, or retiring early in life, etc.
• Set your goals. Write down your goals. Think about what you would like to accomplish financially in the next three months, in the next year, and the next three years. Maybe you would like to have healthy savings by a set date? Maybe you would like to have emergency sav­ings to cover three to six months of living expenses.
• Determine your income. What is your actual net pay? Do not include any overtime pay, mileage pay, bonus pay – these shouldn’t be relied upon as consis­tent income.
• Determine your expenses. Save all your receipts ev­ery month, review your credit card and bank account statements. Where is your money going?
• Set up a realistic budget. Think about it like a “spending plan,” a way to know how much money you have, how much you will be saving and spend­ing. Looking for an easy way to do this? Try the Financial Wellness tools available within Heartland Bank's digital banking.
• Pay yourself first! Saving is a very important way to protect yourself and your family. Make sure you be­gin saving with a goal in mind – “I will be setting X dollars aside in a savings account every month.” Make sure to set-up a realistic dollar amount, simplify it by making it automatic, remember -every cent counts!
• Be careful with credit cards. Remember, when you use a credit card, you are borrowing money you must repay. If you would like to have a credit card, limit the number of cards you get and choose wisely – are an­nual fees involved? What are the late payment fees? Don’t spend more than you can afford monthly and keep track of your spending.
• Check back periodically. Now that you have a plan on how you are going to manage your money, check it regularly – what once worked may not work at a future date. Does your plan still help you meet your financial goals? Did you get a pay increase?