In order to find and achieve success in life, it’s important to always be prepared and ready for any financial crisis or risks that come your way. However, the stark reality is that not everyone knows how to manage their money in an efficient way.
Savology’s recent report on the state of personal finances, along with statistics on MarketWatch confirms that many Americans have their financial priorities backward. It appears as though many are stuck worrying more about their vacations instead of planning for retirement and achieving a debt-free life.
In addition to better understanding your current financial situation, you should be actively working towards your future financial freedom.
With that being said, below are a few self-improvement habits and tips that can help you attain a lifetime of financial wellness.
1. Always try to live within your means
If you want to save more of your hard-earned money and make sure that you don’t compromise your finances, it’s important to strive to always live within your means.
One proven way of helping you live within your means is to track what you spend which will help you understand where your money is going. Additionally, taking a look at your recent bank and credit card statements will help you paint a clear picture of where your finances stand, at least from a spending perspective.
If things don’t seem to be adding up or if you find out that you’re allocating more of your monthly income to non-essential items or services, it might be time to revisit your monthly budget and create an automatic savings plan to ensure that you’re consistently contributing towards your savings.
2. Make it a habit to ask for help when you’re stuck
Feeling stuck or lost with your finances at some point or another is completely normal and happens to every single one of us. If this is the way you’re feeling, don’t feel ashamed or embarrassed.
When you are feeling this way, it’s important that you don’t hold back and neglect to ask for help when you really need it most. This is where an accountability partner and/or a financial expert can give you the support you need to re-align yourself and help you work through your financial challenges.
While this may sound like a counterintuitive method for your finances, spending both time and money on getting financial expertise could end up saving you a lot in the long term. The good news is that you don’t need to hire an expensive financial advisor or wealth manager, there are several options these days that make it relatively easy and affordable including Savology’s monthly financial planning memberships which give you access to live chat with financial experts for around the same price as your Netflix subscription. These experts can help you improve the current state of your finances, set meaningful financial goals, better manage your debt, and essentially work on creating a long-term roadmap that will set you up for a successful retirement.
3. Make sure that you always have emergency funds
Aside from your long-term savings, it’s also extremely important to set aside money every month towards your emergency fund. Unexpected expenses, such as your car breaking down or medical emergencies, can easily make a dent in your finances which can end up putting you in an extremely vulnerable and uncomfortable position if you are not prepared.
The size of your emergency fund should vary depending on your lifestyle, but as a rule of thumb, make sure that your emergency funds can sustain you for three to six months of expenses. Having an emergency stash of money can provide you with peace of mind and deter you from taking out high-interest loans, should you encounter a predicament that might leave you financially stranded.
The road to financial wellness is not paved overnight. However, it’s important to start taking action now and do what you can to ensure your financial stability in the future. By using following the three tips (habits) above, you’ll be well on your way to making significant improvements in both your personal and financial life.
Your financial future starts today
Savology has helped more than 50,000 households across the United States improve their financial well-being by providing effective financial planning in just 5 minutes. Users can get started with our free financial planning or premium monthly planning memberships, allowing them to build a personalized financial plan, holistic report card, personalized action items, and more. In addition to our consumer-facing platform, we’re helping employers across the country provide their employees with effective financial wellness benefits.