You make sure to get your workouts in, and you’re good about scheduling your “me” time whenever work or family stress gets to be too much.
But how good are you about keeping tabs on your financial health? While it may not be as top of mind as your daily run, making sure your finances are in shape is just as important as your mental and physical fitness. Here are a few things you can do to help improve your financial health.
CONTRIBUTING TO EMERGENCY SAVINGS
An emergency fund is one of the most basic ways to build financial security. Because if (or more likely, when) you’re faced with an unexpected financial emergency, this account will serve as a life preserver to keep you afloat and help you avoid going into debt to cover those costs. For most people, a fully stocked emergency fund will have six months of living expenses, but don’t worry if you’re not there yet. Just commit to setting aside what you can into an emergency fund each month until you get there.
PROTECTING YOURSELF AND YOUR FAMILY
Do you have enough life insurance to cover your loved ones financially should something happen to you? Or have you reviewed disability planning in the event you were unable to work because of illness or injury? If you haven’t yet, consult with a financial advisor to discuss disability planning and to see if you have enough life insurance coverage for your situation.
CONTRIBUTING TOWARD YOUR RETIREMENT
Retirement may be decades away, but the earlier you save, the more time your money has the potential to grow with the help of compound interest. If your company offers a 401(k) plan, try to save at least enough to meet the company match. If it doesn't consider setting up a Roth or traditional IRA and put in what you can. It may not feel like much now, but your future self will thank you.
HAVING A PLAN FOR DEBT
There are few of us that don’t have a student loan, credit card balance, or other type of debt hanging over our heads. But you don’t have to be stressed out about it if you have a plan for paying down your debt, even if it takes a little while. Generally, you want to focus on paying down the debt with the highest interest rate first, but here are a few other ways you can prioritize your debt payoff.
SAVING FOR GOALS THAT ARE IMPORTANT TO YOU
Recently engaged and planning your dream wedding? Longing for a post-pandemic vacation that will make up for the canceled trips of this past year? Hoping to own a home in the next few years? Start a savings fund for a short- or long-term goal you really care about. Even if it may take a while to reach, watching your progress will make it even more satisfying once you get there.
HAVING SOME FUN
When creating a budget, don’t forget to set aside enough money for the fun stuff. It’s unrealistic to think you can deprive yourself of things like dinners out or trips — in fact, you could think of it as a way to reward yourself for establishing good money habits. As long as it’s baked into your budget along with your necessities and goal contributions, you should be able to treat yourself without any guilt.
If you need some guidance to create a plan to improve your financial health, reaching out to a financial advisor can help you get on the right track.