Do you expect the unexpected when it comes to your finances?
Turns out, the majority of Americans don't.
A recent Aflac Work Force Report found that 58 percent of survey respondents have no financial plan to handle a large, unexpected cost, while only 8 percent say they're financially prepared, according to the Home & Family Finance Resource Center.
"There are not a lot of people with a Rainy Day Fund," says Tami Rechtenbach, director of member services at Dupaco. "You have to be really disciplined to pull it off."
But it can be done. Here's how to get started:
- Get a Dupaco Money Makeover. It's an opportunity to evaluate your total financial picture - identifying areas where you can cut costs and save money. Maybe you're paying too much interest on a vehicle loan, or you find errors on your credit report that are affecting your credit score. "You have to have a good solid foundation to build upon," Rechtenbach says. "Finding every opportunity in your budget to save money is a good step one."
- Once your financial house is in order, determine your priorities, make sure you have adequate funds for them and identify factors that can derail your plan. For instance, do you have adequate life insurance, homeowners insurance and vehicle insurance?
- With the money that's left over, save for the what-ifs in life and the things you want to see happen in the future. "We need to make sure you're covering your basic day-to-day needs with the income you have coming in and truly find what's left over for savings," Rechtenbach says. Aim for eventually saving at least three months worth of your salary. You can establish multiple savings accounts, giving them names like "Roof Repair," "Vehicle Repair" or "Rainy Day Fund." Set up automatic transfers from your paycheck to the savings accounts, and watch your money grow.
By Emily Kittle