As a nation, we worry a lot about money. According to recent statistics, 25 percent of Americans worry about money very often. Being without money means difficulty with everything else, so it's no wonder financial health is such a common cause for concern.
So what is financial health and how can you prepare for future issues? What do you need to do to stay in a good state of financial health, even during trying times?
In this guide, we're going to take a look at how you can look after your money and stay financially healthy. Ready to learn more about improving your financial health? Then read on to master money management and smart savings.
1. Make A Budget
Budgeting is a common suggestion but if you're not doing it, now's the time to start. Creating a budget gives you the opportunity to plan your finances well in advance, so you won't get caught out by bills or rent. It also shows you where you may be going wrong with your spending and allows you to correct that.
It can also reveal any leftover income which would be better stored in savings for a rainy day, instead of splurged. In short, a budget is a vital component of long term planning. It lets you keep an eye on where you may be going wrong and helps you correct it before it becomes a more major issue.
2. Check Your Credit Report
Are you in debt? It is possible that you may not realize the total debt that you owe, and accessing your credit report is a great way to check that. There are lots of different websites and services that let you take a look at your credit report, which will list every debt that you owe.
This means that you can stay on top of your debt, rather than forgetting about it and letting it accrue interest.
3. Boost Your Credit Score With Regular Credit Card Payments
If you own a credit card and aren't in a bad state of fiscal health, you can use it to boost your credit score. You can do this by buying things on the credit card and then paying them off once the statement has been issued.
This last part is crucial: many people think that paying off your credit card bill before you get a statement helps out your credit score, but it actually doesn't. Credit rating agencies will see a blank statement, as though you have not used the credit card. You want to show that you do use it and make regular, punctual payments: this is what boosts your credit score.
Wait until you're issued with a statement and then pay it off.
4. Understand Where You're Starting From And Your Goals
It's a good idea to think honestly about where you're starting from: if you've got a lot of debt, your starting position will be very different from someone who is debt-free. You should also adjust your goals accordingly: if you are in debt, you should make paying off the debt your number one priority.
Take an honest look at your situation. What do you need to get done? Where would you like to be in a few years?
This goes hand in hand with the planning aspect that we mentioned. Think about your future goals while making a budget, as well as your current ones.
5. Make Regular Deposits Into Your Savings
How much do you have in your savings account? Is it enough to cover an emergency? If you don't make regular payments into your savings account, now is the time to start.
It's easy to get caught up keeping up with the Joneses and spending a lot of money on frivolous things, especially during difficult times. Yet this isn't helping your long-term financial health.
If you can, save one hour's wages per day. If this is too much, make it an hour per week, or whatever amount you can afford to save. However much you save, you'll be building up interest on it and keeping it for a rainy day.
6. Contribute To A Retirement Plan
If you're young, it can be easy to forget about retirement entirely. It's very far off, so why care about it now? It's never too early to start paying into one and, what's more, your employer may be able to help you.
Some companies offer a sponsored 401(k) plan where they will pay a set amount into the plan for every dollar you contribute. This means that you can boost your retirement plan! Take a look at whether your employer offers one and if they do, take advantage of it.
If they don't, you should still be paying into one yourself.
7. Don't Skip Health Insurance
Health insurance is a particularly American problem: it can be easy to avoid it entirely while you're healthy, as this can save money in the short-term. However, you're setting yourself up for a lot of future problems if you do this.
If you get ill or suffer an injury, you may miss out on work and see your income drop while racking up large medical bills. Find a competitive health insurance plan and sign yourself up now so that you can avoid these troubles in the future.
8. Consider Investing
If you have the money to spare, investing could be a great way to build up some additional income. If you're unsure of what you're doing, we'd recommend using an investment broker, however.
You should also never invest more than you are prepared to lose. The market can be tumultuous and you could lose a lot of money, so be a prudent investor.
Keep Your Financial Health In Order
Your financial health may be a big worry but by utilizing these money management tips, it doesn't have to be. Be prudent, pay off your debt, and start saving today: you'll thank yourself in the future!
