The more proactive you are about implementing these financial building blocks, the easier it will be to meet your goals. And while you can't know for sure what you'll face in the future, you'll be in a better position to overcome financial hurdles when they appear—the loss of a job, unexpected emergency expenses, rising healthcare costs or a loss in your investment portfolio—if you have a strong financial foundation upon which you can rely.
Having dreams, setting financial goals and achieving those goals are all possible and probably a part of the future you envision for yourself and loved ones. Making them a reality requires a commitment to maintaining control over your spending, using credit responsibly and making sacrifices when you need to. Though you may face financial challenges from time to time, the more you understand about the tools and products that are available to you, the easier you'll be able to make it through any challenge you face.
Keep in mind these strategies as you work toward your goals:
- Create a budget that will help you control your cash flow and save for the future
- Save—and invest—as soon as you can and as much as you can—for the goals you'd like to achieve in your lifetime
- Establish and maintain good credit
- Be prepared for both predictable and unpredictable financial challenges by being properly insured and keeping your records complete and secure
Followed consistently, these guidelines can form the financial foundation you need to build a secure future.
Successful money management requires looking at your finances from short-, medium- and long-term perspectives. As a first step, you should have a basic financial plan.
Whether it's saving for that dream home in three years, or using your emergency funds to see you through an unanticipated downsizing, having adequate savings allows you to realize dreams and offers peace of mind.
Credit can be a positive component of your spending and saving plan, providing convenience and allowing you to avoid having to carry large amounts of cash to pay for your purchases.
A large part of smart financial planning is anticipating the problems you may encounter and being prepared to deal with them.