LUFKIN, TX (KTRE) - A recent study says most people don't have any savings leaving them just one emergency situation away from financial trouble. East Texas money experts tell us the baby steps that will help set you on the path to financial stability.
The average American does not have money set aside for an emergency but because life happens, most are just one unexpected expense away from a financial mess.
"A lot of people are living paycheck to paycheck. We don't think about saving for the future," said Wayne Ramsey, a financial advisor at OPES One.
Ramsey said building a savings when money is tight can be overwhelming but you can start by putting a little back at a time.
"It can be a smaller amount starting out at first but do that over time and that can help you meet your goals," Ramsey said.
So what about those who are already in debt and need to start saving? Steve Killam is familiar with that situation and was able to find a way out with the help of "Financial Peace University."
"We were making pretty good money...and we didn't have a lot to show for it. We were basically living paycheck to paycheck. We were about $50,000 in debt," Killam said.
Killam said financial security is all about baby steps.
"The very first baby step is to get $1,000 and that's what your emergency fund is," Killam said.
"Typically what planners recommend to have about three to six months of income and expenses set aside," Ramsey said.
Then you start paying off your credit cards from the smallest debt to the largest, then your car, your house while saving for retirement.
"The way your start that is you budget your money. You pay yourself first," Killam said.
And put your budget on paper.
"Sitting down and laying out on paper where your money is going, what you're spending it on, it'll usually surprise people of how much they're spending out on food, alcohol and other things. Then they wonder at the end of the month why we don't have any money but if you lay it out and see where those expenses are going it can be a shocker," Ramsey said.
"Once you do have a budget and once you do have a plan, it's amazing how simple things just fall in and you realize there is a lot of money that goes through your fingers," Killam said.
Experts say the key to financial stability is living below your means and making a plan and sticking to it.
Killam coordinates "Financial Peace University classes in Lufkin.You can learn more about the program here:
Or to talk to Wayne Ramsey further about financial planning call: 936-622-9093 or at email@example.com