Listen to me: Stop focusing on the big picture. Given what is going on in the world right now, you'll only fuel your fear and anxiety.
Macroeconomics matter, but your security depends far more on microfinance—the small choices you make with your money. Every financial worry you want to banish and financial dream you want to achieve comes from taking tiny steps today that put you on a path toward your goals. My list of small moves that yield big dividends:
1. Save a Bit at a Time
I get so frustrated when people tell me it's unrealistic to create an eight-month emergency savings fund, or have money saved for a home down payment, or pay off their $5,000 credit card balance. I am not suggesting that you can snap your fingers and have everything taken care of. What I'm telling you is to move toward your goals in steps. Rather than get lost in the big picture—"Eight months? Are you crazy, Suze? I can never do that!"—focus on what is within your power: the sums you can sock away every week or month to get closer to what you're trying to achieve. Put $50 a week into a bank savings account earning 2 percent interest, and in three years you will have saved more than $8,000.
2. Have a Little Self-Discipline!
Okay, so where do you find the money to put toward your financial goals? If you're dealing with a layoff or furlough, I know you feel stretched to the limit. But often when families tell me they have no money for their goals, I look at their spending and find lots of "wants" to cut. So pull out your three most recent bank and credit card statements, circle every charge or debit that is not a necessity, and ask yourself, "Can I eliminate this cost entirely?" If not, can you scale it back 30 to 50 percent (say, opt for the less-pricey cell package)? Every time you cut expenses, you can put the money toward bigger goals.
So many financial dreams are thwarted by the failure to act upon good intentions. Even if you commit to step 2 and free up money, using it wisely can be a challenge. Complete this sentence: I had every intention of ___________, but I got sidetracked or couldn't stick with my plan. That blank could be: (a) building an eight-month emergency fund; (b) investing in Roth IRA; (c) saving for a home down payment; (d) paying every bill on time; (e) all of the above.
The solution is easy: Put your financial life on autopilot as a form of "forced" saving. Your 401(k) is a great example of auto-investing; with every paycheck, money goes into your retirement account. You can set up the same system at a discount brokerage or fund company to help you invest in an IRA, authorizing the firm to pull money out of your bank account weekly, monthly, or quarterly.
Autopilot is also a great way to save for a home down payment. Have $100 automatically transferred from your checking account to a bank savings account each month and in five years at 2 percent interest you could have more than $6,300 set aside. An FHA-insured mortgage requires a 3.5 percent down payment, so $6,300 would be enough to buy a $180,000 home.
And if you suffer from late-payment-itis, set up auto bill pay through an online bank account. This will save you those $39 late fees on credit card payments and lift your FICO score (on-time payment history accounts for 35 percent of your score).