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We're not all planners by nature. Some of us like to wing our way through life, while others need their schedules mapped out well in advance. But when it comes to managing your money, creating a written plan could help you stay on track and meet your goals. Here are some of the habits people with a financial plan tend to uphold, according to Schwab's 2019 Modern Wealth Survey.
Social Security won't provide enough income for you to live comfortably in retirement, which is why it's crucial that you save for your golden years on your own. Now the good news here is that 78% of people with a financial plan do save money every month (whether for retirement or other purposes). The bad news? Only 38% of non-planners do the same.
If you're not in the habit of saving regularly, it's time to examine your budget, or create one if you don't have one yet, and identify ways to cut back on spending on an ongoing basis. Reducing some recurring expenses will enable you to free up cash that can be used to build a nest egg for retirement or meet other important goals on your radar.
You need emergency savings so you're not forced to resort to debt whenever an unplanned bill lands in your lap. That bill could relate to a home repair, an issue with your vehicle, a medical problem, or something else, and it could be substantial. That's why you really need a minimum of three months' worth of essential living costs tucked away in the bank. But while 68% of people with a financial plan have an emergency fund, only 26% of non-planners can say the same. As such, non-planners may find themselves forced to borrow money to cover unplanned expenses, whether in the form of racking up a credit card balance or taking out a personal loan.
If you're without emergency savings, it's imperative that you slash some expenses in the short-term to build cash reserves. That could mean no going out to dinner at all until your bank account is in a healthier state. At the same time, you might consider getting a side hustle to drum up extra cash for savings. Some suggestions? Consult in your regular field on evenings and weekends (provided your employer allows this), or take a hobby you enjoy, like graphic design or pet care, and turn it into a paying gig.
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