Money can be stressful, and you’re not alone if you feel like you’re just getting by. In fact, 60% of adults in America live paycheck to paycheck, including more than 40% of those earning $100,000 or more annually¹? Even more concerning, 33% have no savings to fall back on in case of an emergency². The good news? Gaining a better understanding of your finances can make a big difference. In recognition of Financial Literacy Month this April, here are a few steps to help you start your journey toward financial well-being.

Start with a Budget
Having a budget means telling your money where to go—you’re in control. It doesn’t have to be complicated. Begin by estimating your monthly income, then list and estimate your monthly expenses. Include everything from rent or mortgage payments to food, utilities, entertainment, and, most importantly, savings. Track your expenses throughout the month and stick to your budget. Many tools can help, including the budgeting tool available in HCU Digital Banking.

Build Emergency Savings
Once you’ve established a budget, it’s time to build an emergency fund to prepare for life’s unexpected expenses. Start by setting aside $1,000 or one month’s worth of living expenses. Eventually, aim for three to six months’ worth of expenses saved in your emergency fund. Whether it’s an unexpected car repair or something more serious like job loss, having a financial cushion can provide peace of mind.

Manage Debt Wisely
While debt often has a negative connotation, it doesn’t have to be bad. Ideally, you should spend no more than 35% of your income on debt payments, including mortgages, car loans, student loans, personal loans, and credit cards.

It’s also essential to know your credit score, as it affects the interest rates you receive on loans. Check your credit at least once a year to ensure accuracy and maintain a healthy score. The higher your credit score, the more affordable borrowing will be. Learn more about credit scores in our previous blog post, and track yours using Credit Score Manager inside HCU Digital Banking.

We’re Here to Help
Whether it’s Financial Literacy Month or any other time of the year, Heartland Credit Union is here to help guide you toward financial well-being. Take advantage of the financial education resources HCU offers, including Enrich, our customizable online financial education tool with valuable tips and insights. Our Member Solution Specialists are also available to assist you with budgeting and getting your financial life on track.

Taking small steps today can lead to lasting financial security. Start now, and empower yourself with the knowledge and tools to achieve financial success.

Sources:

1. "60% of Americans Now Living Paycheck to Paycheck," LendingClub, February 28, 2023.
2. "The State of Personal Finance in America Q2 2023," Ramsey Solutions, November 16, 2023.

Darren WerthAVP of Marketing

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