We’ve spent the past month discussing finances in the SOCO community. It’s a popular topic, and we wanted to dedicate a month focused on independence talking about financial freedom.
It’s a time for the community to ask questions, participate in monthly challenges, and learn how to manage their money better.
As July comes to a close, we’ve rounded up some good advice from our members and resources shared in the community.
Create a Rainy Day (or 911 Fund)
As one of our members put it, you need a 911 fund.
It’s money you set aside when things don’t go well. For example, an unexpected car expense, an uncovered medical bill, or (gasp) your AC starts having issues in the middle of a Columbia summer.
Most financial gurus will tell you to have 3 to 6 months of living expenses saved to cover the expensive stuff life throws your way and to help in the event of a job or income loss.
Get started today by setting up an automated transfer to a savings account and create a goal for how much you need to be saved based on your lifestyle and expenses.
Get Tools and Tech to Help You
Finding the right tools can help you hit those money goals. And the best tool you can have is a budget (okay, calm down, we know you’re thrilled about budgeting).
If spreadsheets aren’t your thing, there are plenty of great apps and online resources to help. Try this list of the best personal finances apps which are Certified Financial Planner approved.
One member recommended You Need a Budget (YNAB) because it forces you to budget the money in your bank account, so you prioritize your needs.
Set Realistic Goals
It’s essential to know what’s going on with your money.
Get organized on what’s coming in (income) and what’s going out (expenses). Then, work on creating goals for your emergency fund (911 fund), future purchases, travel, and whatever else you have going on in life.
When you create goals, look honestly at your finances to see what’s feasible. And give yourself the flexibility to adjust when you need to.
Know Where Your Money is Going
Bottom line, you need to know what’s happening with your money. Look at credit card statements and transaction history to see where you spend most of your money.
If you’re struggling to save, find areas you can cut (like streaming services or Amazon lightning deals).
Sometimes our spending can go up with our income.
“Income creep” is real and can happen in the blink of an eye. NPR has a few great ways you can watch out (and prevent) it in this article.
Increasing your financial knowledge will payoff continually.
And it’s a long game.
The important thing is to continue re-evaluating, adapting, and staying committed to your money goals.