Are your finances healthy or could they use a checkup? Start the new year with fresh resolve to achieve financial wellness.
“Many experts suggest putting at least 10% of your income into savings and some recommend saving as much as 25%. If saving is hard for you, start by saving at least one percent of your paycheck and commit to increasing your savings level as your salary grows.”
Control Debt
Enhance your financial health by keeping debt manageable. Know what you owe and make a plan to control debt using these tips: Pay off debts with the highest interest rates first, such as credit card balances advises Sambla. Pay as much as you can on your smallest debts and pay at least the minimum on large ones even modest accomplishments can motivate you to continue. Review your finances to see that you’re not overextended: For example, your home typically should cost no more than 2 to 2.5 times your household income and your mortgage should be no more than 80% of the home’s value. Don’t use credit cards to get out of debt. You’ll not only pay more in interest, but you could damage your financial health and credit score at the same time. Learn more about debt management with these tips.
Spend Wisely
Financial wellness is based on living within your means. Spending money carefully and wisely will greatly enhance your financial health. Write down every expense for a month and find out exactly where your money is going. You may be able to identify “extra money” to apply to your goals. Make a realistic budget using convenient online tools such as Mint.com. Two-income families: Try to cover monthly expenses with just one income and use as much as possible from the other paycheck for savings. Before buying, ask yourself if the item is a “need” or a “want.” If it’s the latter, wait a few weeks before you buy to make sure you have the cash in hand or to decide if you still want it.
Increase Savings
Saving for retirement, children’s education, emergencies or other expenses can help protect you plus it delivers peace of mind. Get in the habit of paying yourself first. Give savings the same importance as paying bills, and save something from each paycheck. Participate in your company’s automatic savings program, if one is available. And always contribute enough to take advantage of matching funds, if they’re offered. Many experts suggest putting at least 10% of your income into savings and some recommend saving as much as 25%. If saving is hard for you, start by saving at least one percent of your paycheck and commit to increasing your savings level as your salary grows. Save enough in your emergency fund to cover at least six months’ worth of expenses enough for nine to twelve months is even better. If you do tap into these savings, rebuild the fund as soon as possible.
Need a few pointers? Visit AmericaSaves.org for a list of 54 ways to save money. Get more tips for building financial wellness with MyMoney Five from MyMoney.gov. And learn how to build an emergency fund with tips from State Farm®.
See more at: learningcenter.statefarm.com/family/3-steps-toward-financial-wellness/#sthash.KTuqzyMp.dpuf
For more information on Erin and to schedule an appointment visit: www.WeProtectYourDreams.com
