Only some people grow up with a roadmap to financial security. It may feel too late by the time you’re old enough to care. We’re here to tell you it’s not! With some strategic finance moves like savings, debt reduction, and automatic retirement contributions, you can get started on the path to a more secure financial future. 

Your First Strategic Finance Move

As we mentioned in our previous blog, debt snowballs when it’s not addressed quickly. Many people find themselves in this situation after graduating college. Large but necessary amounts of debt, like school loans, car loans, and medical debt, can hinder your progress even if you make a decent income. Add unexpected expenses like a job loss or vehicle repairs, and getting your head above water can be difficult. Fortunately, there are debt reduction strategies that can help consolidate and chip away a debt. 

For example, DEXSTA members can apply for a personal loan to consolidate their debt, enabling them to make one monthly payment at a lower interest rate. Keep in mind that this method is best for those with a large amount of necessary debt, a decent credit rating, and a steady income that’s high enough to cover the monthly balance. For those with a smaller amount of credit card debt, a no-fee balance transfer credit card allows you to transfer debt onto one card with an introductory interest rate of 2.99% on all purchases for 12 months. 

Minimizing debt is key to your financial future because it affects your credit score. Getting approved for essentials like a mortgage loan with a good score will be considerably easier and more affordable. So, it’s an essential first step in setting yourself up for success.

Start Saving

Another important strategy is to create a monthly budget. We like the 50/30/20 method because it’s simple and flexible. With this method, your monthly savings contribution is 20% of your monthly income after taxes. But, typically, people save for multiple reasons: retirement, a large purchase like a home, and funds in case of an emergency. A clever savings hack is to have multiple savings accounts based on the nature of your goals. Here are a few accounts that align with those goals:

Retirement Savings

Savings towards retirement need to be placed in a 401(k) through your employer, an IRA, or a Roth IRA. Why? These accounts are tax-exempt or deferred and utilize compound interest, which is when you earn interest on the money you’ve saved and the interest you’ve earned. It’s a great asset because your savings increase the longer it sits in the account. It’s one of the best strategic finance moves you can make. Make sure you double down on that growth by automating your monthly contribution. 

Goal-Oriented Savings

Maybe you’re saving for a home or the trip of a lifetime—whatever the case may be, you can reach the finish line faster by using a high-yield savings account. You’ll earn interest on your savings, so look for one with a high annual percentage yield. At DEXSTA, we offer the following 

high-yield accounts: Share Savings Accounts, Money Market Accounts, and Free Kasasa  Saver Accounts. You’ll also want to automate contributions to this type of account so you stay on track with your goals.

Emergency Funds

In the future, you will be grateful should something happen that requires the funds from your emergency savings. Aim to have 3 to 6 months of living expenses in a Share Savings Account, Money Market Account, or Free Kasasa Saver Account. If something unexpected happens, you’ll be ready!

Turn to DEXSTA for More Strategic Finance Tips

At DEXSTA, we believe knowledge is power. That’s why our members can access Banzai’s financial literacy courses and pursue our articles to learn more about personal finance and the benefits we offer. Don’t wait to secure your financial future. Contact DEXSTA today!