NASHVILLE, Tenn. (WTVF) — Sunday, August 14, 2022, is National Financial Awareness Day, and the Tennessee Department of Commerce & Insurance’s Division of Securities is reminding Tennesseans of the importance of financial planning to help build a stronger financial future.
They say financial planning is a great way to build a stronger financial future not only for yourself but also for your family.
According to National Today, only 42% of Americans have more than $1,000 in their savings account. The TDCI said if you are one of the 58% who does not have dedicated funds set aside for an unexpected expense or small financial emergency, you’re potentially jeopardizing your financial stability, as many statistics show that it can take only one unplanned expense to derail your finances.
They add that an important budget principle is to ensure you have more money coming in than going out. If you find that your expenses are totaling more than your monthly income, it’s time to make some cuts.
TDCI reminds consumers to remember the following:
Create a budget: Whether you’re just starting out on your own or you already have a growing family, creating and sticking to a written budget for your household can be crucial in meeting your financial goals. Budget tracking apps can help make the process simpler. As you make your budget, ask yourself questions about how and why you spend money and then prioritize your spending. Don’t be afraid to ask yourself hard questions!
Automatic savings: Saving for the future is key to a financial plan. The easiest and most effective way to save is to set up automatic savings, either through a 401(K) or at your bank or credit union. Over time, these automatic deposits add up. For example, $50 a month accumulates to $600 a year and $3,000 after five years, plus interest that has compounded. Soon you will be able to cover many unexpected expenses without putting them on your credit card or taking out a high-cost loan.
Establish a trusted contact: One important step that investors can take is to provide their financial firms with a “trusted contact” — an authorized person who your financial firm can contact in limited circumstances, such as if there is a concern about activity in your account and they have been unable to get in touch with you. A trusted contact may be a family member, attorney, accountant, or another third party who you believe would respect your privacy and know how to handle the responsibility. Having one or more trusted contacts provides another layer of safety to your account and puts your financial firm in a better position to help keep your account safe. More information about establishing a trusted contact can be found here.
Making an investment? Always ask questions: As scammers grow increasingly sophisticated with their schemes and swindles, investors have to be on guard like never before in order to protect themselves. If someone contacts you about an investment that sounds too good to be true, it probably is. Always be skeptical; don’t be afraid to ask questions or walk away if something sounds fishy. Research the backgrounds of financial brokers, advisers, and firms through BrokerCheck.
Tennesseeans can contact TDCI’s Securities team by phone at 615-741-2947 or 800-863-9117 (Toll-Free) or by email at email@example.com if you have questions on how to get your finances together.