Gaining financial security can seem like an intimidating process, but the most important thing you can do is to just take the leap and get started, says Financial Content Creator, Ashley Kilroy.  On this episode of the podcast we discuss the building blocks of financial security.  From figuring out how much money you have coming in and going out to making a budget, building an emergency fund, to minimizing debt, we cover it all.  Ashley even shares her formula investing at any age and her guidance for proper insurance coverage to protect your assets.  

Whether you're just starting out, doubling down on your efforts, or looking for a refresher on the topic of money – this podcast is for you.

Recap

The starting point: the money coming in and going out

To get started on a path towards financial security, you must first understand how much money you are making and what your spending habits are. Take a look at what your fixed expenses (e.g., auto insurance or mortgage) and variable expenses (e.g., utilities) are. Once you have an idea of the money you have to work with, you can organize a budget to follow; 50% for needs, 30% for wants, and 20% for savings, debt, and investing is a good rule of thumb, but there is no one size fits all, and you can tailor your budget to your needs.

Emergency savings fund

Set aside an emergency fund for worst case scenarios such as a car accident or losing your job. Having money set aside will prevent you from having to use credit and possibly winding up in a sticky financial situation. The amount you should have set aside depends on your own situation, but generally, it’s good to have 3 to 6 months’ worth of necessary expenses (basic necessities) saved.

Minimizing debt

Debt can be challenging to get out of, especially with negative compounding interest. If you have credit card debt, student loan debt, etc., start managing your debt by first figuring out what is owed and what the payments will look like. Good communication with your lenders can be beneficial, and you can look into options for handling the payments – i.e., student loans may be deferred for a period if needed or payments can be configured based on income, or credit card interest rates may be negotiated.

Investing

There are many options for investing, and a good place to start is with your employer if they offer a 401k or other retirement savings plan; they may also offer a match program and may have a financial advisor who you can talk to for more information. With investing and saving for retirement, it makes a significant difference if you start early, even if it’s with a small amount, and to stay consistent over time. There are many apps for investing, with some offering fractional shares, and another good option to look into is a Roth IRA, which offers a tax advantage.

Insurance

It is important to have the right insurance for protecting your assets as well as yourself and your loved ones in case of catastrophe. Disasters, such as a fire or car accident, can cause you to lose everything you worked for if not properly insured. When looking into insurance options, it is important to understand what you have and what your needs are to make sure you get the best protection.

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