Steps to Improve your Financial Health

With soaring inflation and the impact of COVID-19, many Americans’ incomes and financial health have suffered significant consequences. It’s easy to think that keeping track of your account balances is all you need to do to stay on top of your finances. But that is no longer true. Today, accounts are spread across multiple financial relationships. 

 Where is your money going? To figure that out, you need to include savings and checking accounts, and credit cards. You also need to look at things like your Starbucks app, Apple / Samsung Pay, Amazon Prime, Netflix, Venmo, PayPal, and your retirement account. Suddenly you realize how challenging it can be to really stay on top of your finances. 

Sustainable financial health requires a holistic approach – putting all the pieces of your finances together. Here are some financial health tips to help you on your journey.

 Create a workable budget. Monitor how much is coming in and how much is going out. Look at the full picture of your income by including salary, bonuses, alimony, interest etc. Start by adding up your childcare, credit card, payments, mortgage/rent, food, utilities, insurance, etc. (Remember to include automatic payments). With that done, you’ll have a better understanding of your finances.

Track your spending habits. It goes without saying that most of us need to pay attention to what we spend. Being mindful of spending habits can help keep us on track to meet goals for retirement, savings, vacations, and even that new fridge.

Beyond your essentials, what do you spend on? Eating out, movies, travel? Understanding your spending habits will help you plan your budget. It also helps you make sound decisions the next time you’re craving take-out.

 Build an emergency fund. Even a small amount put away each pay period can add up over time. Even better, set it up as an automatic withdrawal. An automatic withdrawal into an emergency fund means you don’t see it and don’t need to touch the money – until you need it. 

 Plan for the future. With your finances organized, planning for the future comes next. What do you need for your new car, home, or retirement? How do you get there? With your budget fully in mind, start looking at how you can make saving for your future your priority. Our free, online calculators can help you solve common financial questions.

Success step-by-step. You aren’t alone if you dread thinking about your finances. Trying
to look at the big picture all at once can seem overwhelming, so start by taking one step at a time. Step 1. add up income; step 2. figure out expenses; step 3. create a budget; step 4. set up alerts and more to help track your spending.

 Financial health is a process and taking the steps necessary to really know where your finances stand is the best way to a healthy, and happy, relationship with your finances.