No Excuses: Fiscal responsibility and financial planning
By Andrew Gobin, Tulalip News
Tulalip − With the holidays coming into full swing and people struggle to make ends meet, family budget and financial planning are too often a second thought.
“In general, American families lack budgeting and financial planning,” said Dave McLean, the housing finance and budget advisor at Tulalip.
“The best thing families can do is sit down and specify their needs and wants. Bills and groceries are needs, for example. Make a financial plan and budget to cover your living costs, then the rest of your money can go towards purchasing things you want, or into savings. As a general rule you should save about 10 percent of each check,” explained McLean.
A financial plan that includes allocating money to savings sets you up for success later on in life.
“Start at 10 percent,” said McLean. “Ideally it should be more than that, but it’s specific to each budget. When you want to buy a house, the down payment is typically 5 percent of the total cost of the house. Your savings should be enough to cover that. Continue saving money and grow your nest egg. The money you put away should see you through your retirement, in addition to any retirement plan or pension you may have.
“Credit is another aspect of fiscal responsibility. Financial planning will assist you in paying off large dividends, like a car payment, and monthly bills, all of which build your credit. How much money you save plays into that as well.
“Credit cards are great at establishing credit early on, but should be used carefully. Be sure to eliminate your incurred debt as soon as possible. The best plan is to pay off your credit card each month, both building your credit score while sticking to your budget.”
Not everyone has the necessary skills to budget effectively. McLean mentions that there are numerous budgeting classes offered at community colleges, churches, and even suggests budgeting manuals that can be found at the library.
Mclean said, “Nobody has an excuse not to pay more attention to budgeting. It is an important skill that will help everyone later in life.”