Maurie Backman from The Ascent wrote about some tips and tricks on how to minimize financial stress. Here’s what she had to say:
Maintain a Solid Emergency Fund: Backman admits that her personal emergency fund is extremely strong in fear of unplanned financial burdens. She claims that it’s typical of her to save at least a year’s worth of expenses/bills. She admits that it’s probably safe to have a little less than that, but it’s encouraging to have left over savings for investment opportunities. Regardless, it’s better to be over prepared than under, and she claims that keeping a year’s worth gives her significant peace of mind.
Under Budget Home Owner: Backman references the rule of thumb to limit your monthly housing expenses to less than 30% of your income. If you’re looking to buy a home in the near future, analyze your annual income and make sure you aren’t spending too much on home expenses, or else there won’t be much left over for recreation, food, or investing.
Revise your Budget: To ease your worries, Backman suggests updating and revising your budget often to account for rising expenses. Checking in often is a great way to be confident in your financial status and ensure you have enough money.
To read more from Backman, please visit www.fool.com.
Written By: Your Financially Fit Me Team