One of the hardest things about “adulting” is knowing how to manage your money and boosting your financial health before you do “grown up” things like applying for a mortgage or a loan. It is not just the young, however, who are affected by financial health.
Thanks to the way the system in the US is set up and run, it is too easy for people to find themselves in debt as a result of things like medical bills, prescription costs, unemployment, or just generally through a series of unfortunate events that can affect their financial stability.
To try and help as many people as possible, we have put together a list of our top tips on how to boost your financial health, no matter where your starting point is. Whether you have already been saving for years or you are simply starting to try and address your debt, we cover everything that you will need to know about boosting your own financial health.
1. Get On Top of Your Finances
Before you can improve your financial situation, you will first need to identify any areas where there might be an issue. In order to do this, we would recommend setting up some sort of filing system so you can keep track of any bills, outgoings, and payments.
There is plenty of digital software available to use for free these days, such as the cloud accounting software, Xero, and other apps that you can download onto your mobile device. Alternatively, you could always stick to some good old-fashioned pen and paper records!
2. Clear Any Existing Debts
Trying to boost your financial health when you already have an existing line of debt can feel like a bit of an uphill struggle, but there are definitely ways that this is still possible. If you cannot pay off your existing debts in installments or if it is taking too long, the interest rates can soon start to add up which can end up being more expensive than the debt itself!
To avoid spending unnecessary money on interest rates, it is sometimes worth taking out a personal loan from a lender like Credit Ninja. Typically, these types of loans will have lower rates which means you will have to pay back less money overall by the time the debt is paid.
So, in some cases, it can be worth paying off your debt with a personal loan and then paying back the new loan you have taken out in monthly installments to clear the debt completely.
3. Live Within Your Means
One of the first things you will learn about as you are trying to boost your financial health is that the whole process will be a lot easier if you set yourself a clear budget before you start. A good budget will take into account your outgoings, expenses, bills, and any money that is likely to be coming out at the start of each month. (Side note – if you have your bills set to come out at the end of the month before you get paid, change this!
Always try to pay off the things that need to be paid immediately after receiving your wages so you do not run out). Once you have set your budget, it is important that you try to stick to it as closely as possible. This could mean cutting back on some of your usual daily expenses because they no longer fit within the budget that you have set for yourself so you can limit your spending.
4. Set Yourself Financial Goals
Boosting your financial health is not just about clawing your way out of any debt that you currently have, but it is also about looking towards your future and thinking about how you can improve your financial situation even further. You can do this by setting yourself goals.
Just like with any goal, once you have established it, you can then start to think about a plan and how to put it into action in order for you to reach and achieve your financial goals. Your goals can be entirely dependent on your and your needs, so they can range from anything such as having a lump sum of savings in time for Christmas or putting enough away each month into savings so that you can send your kids to college one day.
Ouch. Whatever your financial goals are, this is where your budget will really come into play, as if you can make sure that these two things align, then you can work towards your goals.
5. Be Smart About Your Savings
It can be far too easy to get wrapped up in the here and now without thinking too much about the future, but this is one of the worst things you can do if you are hoping to boost your financial health. We would always recommend saving for a “rainy day” fund if you can.
This can be vital if you do end up running into some unexpected costs like the ones I mentioned earlier, including hospital or medical bills, car trouble, or any type of expense that can pop up out of the blue and land you in some serious debt if you are not careful.
Saving even as little as $10 a month by setting it aside (i.e. out of your budget) can really start to add up by the end of the year. You can increase your total savings by adding any money that may be leftover in your budget from the month instead of letting them roll over.
It is usually a good idea to set up a separate savings account if you are trying to save so you can keep your finances separate. Alternatively, you can also save through making a few wise investments that will hold their value or increase in value as the years go by. We hope that you have found these top tips for boosting your financial health helpful!