Saving and money management are lifelong and can go a long way toward helping you achieve financial success. But even the best laid financial plans can be met with obstacles that require you to pivot in order to stay on track for your goals.
A recent WSFS Bank study gauged the financial goals, confidence and access of those 18 years and older, and found that 67% in the Greater Philadelphia and Delaware region feel confident they will achieve their financial goals. However, obstacles such as inflation and poor credit still remained a concern for many regional consumers.
Here are tips to help overcome common financial hurdles and chart a course toward achieving your goals.
Dealing with Inflation
Inflation has been a hot-button issue lately, with many consumers feeling the strain of increased prices on everything from groceries to cars and more. The WSFS survey found that 44% of regional respondents are not confident they can keep pace with inflation’s impact on goods and services, underscoring the challenges consumers currently face when managing their money.
The impacts of inflation can also hamper your larger financial goals, such as building emergency funds for yourself and your family, a goal that was top-of-mind for more than half in the region (54%).
While inflation can make it more difficult to save, building that rainy day fund is still vital to protecting yourself from the changing economic and social economic influences around us. Consider opening a money market or higher interest-bearing account for your savings, ensure your investments are well diversified, shop for bargains and re-evaluate your budget regularly to cut unneeded expenses.
Improving Your Credit
Another top goal identified by the WSFS survey was the need to improve credit scores, with 42% in the region citing this goal, and 84% saying they’re confident they can achieve it.
Building and maintaining a strong credit score, generally one above 700, can be key to achieving your financial goals, and is particularly important as it relates to borrowing as it can impact the rate offerings for your mortgage, loans and more.
If you find your score still needs work, start by ensuring you understand the basics of what a credit score is and what impacts it, such as payment history, credit utilization and mix.
Once you have the basics down, take steps to improve your score by paying down loans and credit cards with the highest interest rates and try to get your debt-to-credit ratio below 30% to avoid negatively impacting your score. Checking your credit report from the major credit bureaus (Equifax, Experian and TransUnion) periodically can also help identify inaccuracies or even fraudulent items that could be bringing your score down.
Saving for Large Purchases
Among the other common goals uncovered in the survey, 36% cited the need to save for a large purchase, with 29% saying their goal is to buy a home or apartment. Three-quarters (75%) of regional respondents were confident they could save for a large purchase, while 63% were confident they’d be able to buy a home or apartment.
Saving for these large purchases takes time and patience, particularly in times of inflation. Start by identifying your goal and the cost associated with it and work your way backward from there to build a roadmap and budget to achieve it.
Find a budgeting method that works for you, for example, the 50/20/30 Rule, which allocates 50% of take home pay toward necessities like food and rent, 20% for savings/debt reduction and 30% for lifestyle choices. There is no one-size-fits-all method that works for budgeting, but the most important thing is to ensure there are no deficits and to revisit your budget regularly to look for additional savings.
If you find yourself needing more help building your roadmap to success, consider speaking with your banker, who can offer additional tips as well as help identify the products and services that will help you succeed.
Helping you boost your financial intelligence.
Read our financial resources from your friends at WSFS.