No matter your financial situation, there are common-sense financial principles and practices that you should try to follow.

Track Where Your Money is Being Spent

Budgets are great for ensuring you don’t OVERspend (we have a free budgeting worksheet on our website!), but tracking your actual spending will help you determine WHERE you’re spending your money.

Separate your spending into categories and over the course of several months, monitor your spending in each. Essentials like housing, utilities, car payments, and groceries will make up the bulk of your spending. But take a close look at how the rest of your spending is distributed. It can provide you with valuable insight into areas of potential savings or help confirm that your spending habits are healthy.

Tracking your spending shouldn’t just be a one-time activity. There are apps that allow you to track your spending on a continuous basis, or you can DIY it with a simple spreadsheet.

Don’t Buy More House than You Need

Buying a new home is an exciting time in anyone’s life! However, it’s important to not get carried away in that pure excitement and to remain level-headed and focused during the homebuying process.

One of the first things you’ll want to get real about is what you can afford. Getting preapproved for a mortgage is an initial step in this process. Preapproval determines the maximum loan amount based on your debt-to-income ratio, but it shouldn’t be used as your budget. Preapproval doesn’t take into consideration the other costs of living or owning a home such as utilities, insurance costs, maintenance, and more. For example, while it might be exciting to think about purchasing a $400,000 home, affording a $400,000 home will be a completely different story.

Be realistic about what you actually need in a home and pair that with what you can truly afford on an ongoing basis. Buying a home should be a sustainable financial decision to ensure you’re not compromising your financial future.

Save Money Whenever You Can

There’s nothing scientific about this concept: if you’ve got money left over after your expenses, it should go into savings. It doesn’t have to be a lot - even $1 at a time adds up

If you’re living paycheck to paycheck, don’t worry. There are actions you can take to begin saving money. While small changes, like adjusting your thermostat, cutting down on meals out, and buying generic brands at the grocery store, can help you save, there are other steps you can take to see larger savings and still be able to enjoy the occasional splurge. You can often find savings by refinancing existing loans, transferring high-interest debt, and negotiating monthly bills. Also, for any financial windfalls you might receive, like a tax return or bonus at work, resist the urge to spend it all and put at least a portion of it into savings.

Don’t Carry Credit Card Debt

A credit card can be a useful tool in establishing a credit history for yourself, but the key is to make sure you’re able to pay off your credit card debt in full at the end of each billing cycle.

Carrying credit card debt affects your credit history, your credit score, and your debt-to-income ratio, which are all factors considered by the lender when determining your eligibility for loans or even what interest rate you’ll receive on a loan. So, you’ll want to make sure that if you do have credit card debt, you make payments on time and keep your balances as low as possible.

Reducing and eliminating your credit card debt is possible, no matter what your financial situation is. It will involve hard work, strict budgeting, and commitment, as it’s not something that goes away overnight. And once you pay it off, keep those card balances at $0!

Practical Money Tips for All Stages of Life

PSECU is here to ensure our members achieve more. Whether just navigating the basics of financial know-how or levelling up your financial prowess, you’ll find tons of educational resources on our WalletWorks page.

The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Some products are not offered by PSECU. PSECU does not endorse any third parties, including, but not limited to, referenced individuals, companies, organizations, products, blogs, or websites. PSECU does not warrant any advice provided by third parties. PSECU does not guarantee the accuracy or completeness of the information provided by third parties. PSECU recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions.