Our financial health isn’t something we often like to discuss. It’s a sensitive subject, and for good reason. But even if money is a stressful topic, keeping up with how it’s saved and spent is an important practice. Recently, the Financial Health Network released the U.S. Financial Health Pulse report which provides a snapshot of where Americans are financially. Currently, over half of Americans are struggling with some aspects of their financial lives and only 29 percent are considered financially healthy. Most Americans (78 percent) are living paycheck-to-paycheck, and while it may not come as a surprise, there are big differences in financial health based on income, age, gender and race. When two or more of these categories intersect, it often makes differences in financial health even bigger. The most dramatic shifts in financial health usually happen when there are changes in employment or physical health. So, if you feel stressed out because of your financial situation, know you’re not alone.
While the statistics look bleak, there are ways to alleviate financial stress. Practices like regularly setting money aside for emergencies – even a small amount – can soften the negative effects of unexpected life events. This might seem like an overwhelming task to include in your budget when money is tight, but there are several tools out there to manage daily finances and build an emergency fund. So where can we start?
Make saving money a habit! It’s easier to build a rainy-day fund when you’re consistently putting money away. The Consumer Financial Protection Bureau offers some key principles when creating a spending habit:
Set a goal. Goals help us stay motivated. The goal of establishing an emergency fund is a great place to start. Try to make your goal as specific as possible. For example, exactly how much do you want to save? And by what date? Write your goal out and place it somewhere you will see it daily!
Create a system for making regular contributions. There are many ways to save. Automatic recurring transfers are one of the easiest ways to carry out this step. If that doesn’t sound like it will work for you, try setting aside a specific amount of cash on a regular basis – this might be each day, week, or payday. Try to keep the amount specific and consistent, and if you can occasionally afford to save more, your savings will grow even faster!
Regularly monitor your progress. Keep track of your savings. Sign up for automatic account notifications or keep a running total of your contributions. Watching your progress will likely deliver pleasant surprises and give you the encouragement to keep going. Think of saving as a way of paying yourself!
Celebrate your successes. If you’re staying with your savings habit, recognize your accomplishments! Find small ways to treat yourself and once you’ve reached your goal, set the next one.
While it’s easier to save when you have a reliable income, anyone can start saving. Whether you have a regular paycheck or money consistently coming in, you can create a routine of putting some of that money into an emergency savings fund. Visit finhealthnetwork.org or consumerfinance.gov to learn more!
Looking for more information on setting financial goals and building a spending plan? Ohio State University Extension Wayne County offers Money 101, a series of four classes covering a variety of financial health topics. We also offer Steps to Home Ownership, a series of four classes for prospective home buyers looking to learn more about the home buying process. Both series are offered in March. Call 330-264-8722 or visit wayne.osu.edu for more information and to register for either class.
Sara Meeks is an OSU Extension Family & Consumer Sciences Program Assistant and may be reached at 330-264-8722.
CFAES provides research and related educational programs to clientele on a nondiscriminatory basis. For more information, visit cfaesdiversity.osu.edu.