Building a Strong Financial Foundation

My name is Wes Burns and I lead Community and Economic Development at Midwest BankCentre. Throughout 2024 I’ll have a monthly column in The Labor Tribune, and my commitment is to delve into topics that hit close to home, addressing personal finance issues that can have a significant impact on each of our lives.  We’ll explore strategies to break free from high-interest debt, discuss the ins and outs of budgeting for a down payment on a home, decode the mysteries of credit scores and even share tips on how to optimize your savings to meet your goals and guide you through the steps to build a credit score that opens doors rather than closes them. 

Today, I wanted to dig into six essential money management tips that help us build a strong financial foundation. 

Tip 1: Create and Prioritize Financial Goals

Think about what you want to achieve – maybe it's owning a home, paying off high interest credit card debt, or having a cozy retirement. Break these goals into small and big tasks, so you always know what you're working towards.  Have weekly, monthly and yearly goals and track your progress against each.

Tip 2:  Write Down Your Goals

It’s important to write your goals down!  Research consistently tells us that when we write down our goals, we significantly increase our chances of achieving them.  When we put pen to paper, our goals become more than just thoughts.  The written commitment helps us better define our goals and holds us accountable to them.

Tip 3: Track Your Budget and Expenses

Creating a budget is similar to drawing up blueprints for a project – it's the roadmap to financial success. There are a lot of great budgeting apps that help you track your income and expenses and help you easily categorize your expenses to identify areas where you can cut back.

Keep a close eye on your subscriptions as it seems like everything requires one these days – from music and TV streaming services to online storage, gaming, and audiobooks. These small, recurring expenses can add up, so it's crucial to stay vigilant.

Tip 4: Build and Maintain an Emergency Fund

Life throws us all curveballs at some point.  Building an emergency fund provides a safety net during unforeseen circumstances and prevents you from relying on credit cards or loans for sudden expenses.

Aim to save three to six months' worth of living expenses in an easily accessible account.  You can make it easier to build this account by setting up automatic transfers from your paycheck to a special account set up specifically for emergencies.

Tip 5: Make Your Money Work for You

Saving isn't just stashing cash away; it's about making your money do some work for you. Look for savings accounts with competitive interest rates and explore investment options that align with your risk tolerance, time horizon and financial goals.  You could explore options like CDs or money market accounts - allowing you to benefit from compound interest and potential market growth. Seeking professional financial advice can help you make informed decisions and maximize your savings potential.

Tip 6: Manage Credit Cards and Improve Credit Score

Credit cards can be valuable financial tools if managed responsibly. Pay your credit card bills in full and on time to avoid interest charges and late fees. Keeping your credit utilization ratio low and maintaining a healthy credit history can positively impact your credit score.  If you need to build or re-build your credit, consider a Credit Booster CD and remember that responsible credit management and timely payments are crucial for long-term credit score improvement.

Partnering with Midwest BankCentre: Your Trusted Financial Advisor

Navigating your financial journey can be complex, but you don't have to do it alone. Midwest BankCentre is more than a bank; we are your trusted financial advisor. Our commitment goes beyond providing banking services – we offer financial solutions designed to meet you where you are to help you get to where you want to be.

Originally published in Labor Tribune's January issue of 2024 by Wes Burns, EVP of Community and Economic Development.