Sikorsky Credit Union has often promoted financial literacy within local schools to educate students on the basics of money management, but studies show that in the United States as a whole, most people aren't taught these skills. In fact, only 16.4% of students are required to take a personal finance class.

When you look at the fact that nearly 60% of Americans don’t have enough savings for an unexpected expense of $500 or more, you realize that Americans have a real problem with money management. The best way to start to understand your money and manage it more efficiently to hit your financial goals is to come up with a budget and follow it.

You might have heard about budgeting before and dismissed it, I know I have, but budgeting doesn't have to be a scary and complicated concept. After all, a budget is merely a plan to help you reach your financial goals.

Figuring Out Your Financial Goals
The best starting place is to figure out what your financial goals are. What do you want to save for in the short and long term? Figure out what's important to you and how much you'd like to save for each of those goals in total. My savings goals include having an emergency savings fund, vacation fund, and retirement fund, but it could vary greatly depending on the person.

See Where You're Spending
Next, it's important to see where your money is currently going. Take a look at your past statements or receipts from the last 3 months. Make a note of how much you've been spending on necessities (utilities, mortgage/rent payment, groceries, cellphone, etc.), wants (shopping, entertainment, hobbies), and what you've put into saving.

Creating Your Budget
One smart budgeting plan is the 50/30/20 rule, which means putting no more than 50% of your income towards necessities, 30% towards your wants, and 20% towards savings.

First, take your monthly after-tax income and divide it in half. This number will go towards all of your necessities. This means all of the payments you must make or else you would be penalized, including housing payments, utilities, groceries, gas, and minimum credit card payments. When looking back at how much you spent on necessities – does it equal to half your after-tax income? If it's exceeding that number, consider finding a way to lower your spending here.

Next, take 30% of what you have left and see if that number correlates with what you're currently spending on your wants. Often times, you'll realize that you're paying more than you think. If this happens to be the case, consider lowering your spending to match this number by reducing the amount of time you buy coffee, go out to lunch or dinner, go shopping for clothes, etc. and prioritize the spending on your "wants" that are most important to you.

Lastly, take the last 20% and put that towards your savings and debt repayments. Divide it up whichever way you like to stay saving more money towards your financial goals or putting this money towards your credit card debt or loans. The minimum payment for loans and debt is a need, but anything extra you want to spend towards it can be taken out of this 20%. 

If you're looking to save money easily, consider opening a club account with Sikorsky Credit Union. We can help you save for holidays and getaways throughout the year. To learn more, click here

Cornfield, J. (2019). Survey: 41 Percent Of Americans Pay For Unexpected Expense With Savings. [online] Bankrate. Available at: [Accessed 4 Mar. 2019].

Desjardins, J. (2019). Most US high school students never have to take a personal finance class. [online] Business Insider. Available at: [Accessed 4 Mar. 2019].

Pant, P. (2019). How to Manage Your Budget Using the 50/30/20 Budgeting Rule. [online] The Balance. Available at: [Accessed 4 Mar. 2019].