7 Tips To Improve Your Financial Well-being
How do your finances look right now? If it is not so good, you are far from alone. In the United States, thousands of people fall into debt and become behind on bills each year for many reasons. With that said, there are several steps you can take to improve your money situation.
Why You Should Improve Your Financial Well-being
Whether you are looking at life insurance, solutions such as Bank on Yourself or other options to improve your financial well-being, there are numerous benefits to doing so. Not only will improving your finances help you catch up on bills and better support yourself, your loved ones and/or your lifestyle, but it can also improve your mental and physical health, too.
- Set Aside 20% of Your Income
Every month, set aside 20% of your income for long-term essentials such as emergency savings, debt repayment and retirement. Because it can be easy to spend money on day-to-day expenses such as food and recreation, it is important to set this income aside as soon as you get your paycheck to ensure you have the funds when you need them most.
2. Use 30% of Your Income for Leisure
With that said, you should also get to enjoy yourself after all of the hard work you put into earning a paycheck. However, it is necessary to do so in a financially responsible manner. Ideally, do not spend more than 30% of your income on leisure activities. If you predict essential expenses that relate to your health or financial independence, be sure to prioritize accordingly. The key here is finding a balance that allows you to have fun while still taking care of yourself.
3. Create a Budget Calendar
One smart way to better prioritize your spending is to create a budget calendar that outlines all of your due dates as well as payment dates. In addition to weekly, biweekly and monthly dates, make note of quarter and annual occurrences, too, such as filing taxes or downloading your credit report. Creating a budget calendar is also a good way to incorporate better financial habits into your daily life.
4. Create a Budget
What is a budget calendar without a budget? After you put together a calendar that lists all of the important dates that you need to remember, you should also create a budget. Depending on the type of notebook or software you prefer, you may want to do these two steps simultaneously. When creating your budget, be sure to prioritize your needs over your wants, and always set money aside for the unexpected. All the planning in the world cannot prevent every emergency from happening.
5. Save Money Consistently
In addition to creating a budget and creating an emergency fund, you should always look for other ways to save money consistently. Whether you make an effort to shop during sales, use coupons and take advantage of other types of money-saving opportunities, there are many ways to cut back on your spending. Saving money is a habit that people must learn. Fortunately, there are many methods for doing it.
6. Consider Consolidating Your Debts
If you are one of the many Americans who face significant personal debt, another option you may have for improving your financial well-being is to consolidate your debts. A common way for people to do this is by taking out one large loan to cover all of their other ones. If you have a regular income and you want to avoid bankruptcy, this option may be appealing.
7. Check Your Credit Report Regularly
Every year, the law entitles each person to a free annual credit report that provides detailed information on their personal financial history. Whether you regularly use credit or not, it is a good idea to take a look at yours at least once a year. In addition to increasing self-awareness of your credit situation, annual credit checking can also help you prevent fraud.
There are many benefits to improving your financial well-being. Follow these tips to help you start today.