The COVID-19 pandemic has left millions of Americans out of work and laid bare the fragile financial situation of an estimated 78% of U.S. workers who were already living paycheck to paycheck.
FAIRWINDS Credit Union has built its more than 70-year reputation on an altruistic approach to helping members achieve financial freedom. July 1 is national Financial Freedom Day, and this year, FAIRWINDS marked the occasion with practical advice to help people get back on their feet and build toward the financial security to prepare for the next time the unexpected happens.
1. Build an emergency savings fund to prepare for the unexpected, like car repairs or medical emergencies. Setting aside $2.74 per day can save $1,000 in a year.
2. Work toward saving three to six months' worth of expenses to replace lost income from a future layoff or extended illness without having to rely on credit cards or dipping into retirement funds. Open a designated savings account for the emergency savings and 3-6 month expense funds, so you’re not tempted by seeing that extra money sitting in your checking account.
3. Track spending with a budgeting app that lets you categorize transactions, see where your money’s going, and make adjustments; all from your phone or tablet.
4. Use the snowball method to gain momentum on paying off debts by applying extra money each month toward your smallest debt first, while making only the minimum monthly payments on all your other debts.
5. Chose a shorter-term auto loan like 36 or 48 months. Once your loan is paid off, keep your car and start putting the same loan payment amount into your savings account. That way, you can save to buy your next car with cash or make a sizeable down payment.
6. Participate in your company's 401(k) or 403(b) retirement match program to avoid leaving "free money" on the table.
7. Pay off your home or auto loan faster by making biweekly payments. Dividing your monthly payment in half and paying that amount every other week will result in an extra full payment toward principal each year.
8. If you’re passionate about helping your community and those in need, donating your time and talents is just as impactful as donating money. In fact, the value of a volunteer hour is $25.43.
9. Life is a journey, and financial freedom is no different. You need a goal to guide you, and a savings plan to help you stay the course and be ready for detours that come along the way.
Founded in 1949, FAIRWINDS is a nationwide members-only, member-owned, not-for-profit financial institution. Its mission is to help members achieve financial freedom by providing tools, products, and advice to encourage them to save more, eliminate debt, build wealth, and live generously. Membership which includes access to consumer checking, deposits, and low-rate, short-term auto loans. For more information, visit www.fairwinds.org.