20 Ways to Achieve Better Financial Health

Financial self-care is just as important as caring for physical and mental health. While it may seem like a never-ending maze, there are plenty of small steps to take towards strong financial health.  Whether you’re retired and on-the-go, or working towards your dream retirement, don’t stand still! Follow these tips to potentially create better financial habits.

  1. Prioritize your debts

One of the top financial priorities for Americans in 2020 is getting rid of debt. Consider using your budget surpluses to pay off the debt. There are two major methods to pay down your debts as fast as you can.

There’s the Snowball Method. Pay off the smallest balance first while paying the minimums on your other debts. Once you pay off the smallest balance, contribute the same money to your next balance in addition to the monthly payments you already make. Continue this until all your debt is paid off. For many, this may not seem like a good idea because of the interest accrued by debts with higher interest rates, but studies have shown a psychological benefit to seeing a debt reach zero. Many who have used the snowball method stick with it until they are debt free.

The other method is called the Avalanche Method. It uses the same strategy as the Snowball method, but you’d be paying off the debt with the highest interest rates first regardless of the balance. This method requires a lot of discipline as it may take longer to pay down the first debt, BUT it will save you more money in the long run, as well as pay down your debts faster overall.

  1. Track and update your monthly expenses

Many Americans admit to spending without cause. Instead, track your expenses and budget monthly. This will keep you accountable while helping you find ways to reduce spending—maybe you forgot about all the subscriptions you pay for but don’t use. Maybe you can eliminate unnecessary costs such as buying coffee at the café and making it at home instead!

  1. Automate savings contributions

Do you find yourself constantly skipping savings contributions? Sign up for automatic withdrawals on your payday, you can’t miss the money if you never see it! Additionally, this forces you to spend less as you will have visibly less in your checking account. Money on hand is money spent!

  1. List your monthly and yearly financial goals

Creating and reviewing your financial intentions can keep you on track. Establishing monthly goals to help achieve your yearly goal can make it more attainable. If you’ve never done this before, start out with something small and easily achievable. Eventually work your way up to larger goals. Looking to save up for a major purchase or construction on your home? Divide it up into equal payments per month and then per week. Reassess if you find you can contribute more or need to contribute less.

  1. Check your credit score

Your credit score typically reflects your financial situation and is a deciding factor for many financial purchases. Frequent monitoring can help improve and protect your score. Many people forget to check their credit score prior to purchases that rely on this number, like buying a car or applying for a loan. Avoid mistakes that can lower your credit score prior to such purchases, such as applying for a new credit card or requesting hard inquiries.

  1. Try no-spend challenges

Do you spend more than you’d like? Try a no-spend challenge! You can start small, such as for the weekend, and increase as you go. Not only will this conserve money, but you may discover fun activities in your home! At the end, give yourself a small reward. Spend a quarter or a half of the money you saved to treat yourself.

  1. Increase contributions to your retirement account(s)

Despite your age, retirement will sneak up on you! Contribute as much as possible for a potentially easier retirement. This is especially important if you started late as there are increased contribution limits the closer you get to retirement. With The SECURE Act, you can continue to contribute as long as you continue to work.

  1. Evaluate last year’s financial mistakes

Did you make any financial goals for 2019? Asses your progress and mistakes you’ve made throughout the year. Mistakes are natural but repeating them is harmful.  Take an honest look at what the cause of the mistakes are, how you got there, and preventive steps to keep it from happening again.

  1. Create your financial team

With retirement plans, investments, 529 plans, estate planning, and more you’ll need a financial squad to help reach your financial goals. Not every financial professional can do everything, nor do they know the intricate details of everything. Check out our blog post for tips to creating the best lineup for you!

  1. Visit physicians regularly

Medical bills can be expensive. The best way to avoid them? Visiting your doctors regularly can potentially prevent costly emergency trips and expensive avoidable treatments. Preventive and proactive decision making can potentially save you money in the long run.

  1. Read up on personal finance

Many people fall into the trap of “My money will be there for me when I need it” and do not pay attention to what their finances are doing, whether that is investments, savings, CD’s, etc. Not all goals utilize the same strategies to get there. Staying up to date may help you care for your financial health. Use this information as a reminder to stay aligned with your goals.

  1. Prepare for emergencies

If you haven’t created an emergency fund yet, what are you waiting for? Nearly 28% of households have ZERO in emergency funds! When trouble strikes, they may go into crippling debt or have to scale back substantially in order to whether the storm. Don’t be a statistic: Start an account or contribute as much as possible to your current emergency fund—you’ll be grateful during a financial crisis.

  1. Start your retirement planning

It’s never too early or late to start! A financial professional can help create and manage your plan. Don’t just set it and forget it. If you already have a plan, remember, the upkeep is just as important as the creation. Circumstances change, politics change, laws change, so it’s important to stay up to date with a trusted financial professional so your wealth lasts as long as you do!

  1. Call your credit card companies

If you’re in good standing, try calling for a limit increase or APR decrease. An increase in your credit limit would affect your debt/credit ratio, which in turn can increase your credit score (unless you have ZERO in credit card bills, then great job!). If you do have credit card bills, it never hurts to negotiate a lower APR, or transfer a balance to one with a much lower APR, especially if they have a promotional offer!

  1. Evaluate your budget and reduce where possible

As you track your expenses, decide if your budget is working for you. Are you able to decrease any expenses or find opportunities to increase income? Review it quarterly to ensure you’re meeting your financial goals and not simply drifting along hoping everything is working.

  1. Spend within your means

Debt is typically created when spending outside a budget—try to avoid this. Some debts are simply unavoidable, such as home purchases, buying a car, and getting more education. Those loans can typically help build equity or provide opportunities to generate more income, but try to keep those debts off credit cards, as the interest on retail credit cards are enormous compared to loans designed for a specific thing (mortgages, car loan, educational loan).

  1. Meet with a financial professional

In the age of Google and unlimited resources of online information, we see a lot of do-it-yourselfers. But, with a lot of information comes a lot of different advice and opinions. This can leave you confused as to what to do. Why not talk to someone who’s job it is to provide the best possible advice, manage your investments properly, and potentially help reach your financial goals?

  1. Plan large purchases

Research for the best price and deals and never settle on the very first thing you see. You may find the same item priced significantly less elsewhere or there may be a big sale coming up (Federal Holidays and after New Years are primetimes to find deals). Plan your purchase and begin saving up weekly and monthly to head towards your goal!

  1. Increase your investment knowledge

Take classes, sign up for seminars, or do some research. This can benefit you no matter your investment amount, because you’ll be able to make informed decisions. This will also allow you have proper knowledge when talking to a professional. Don’t be a bystander when it comes to your money — play an active role. The more you understand, the better the service you can get from professionals that work with you and your money!

  1. Get a portfolio check-up

Portfolios are like cars, regular maintenance keeps a car running great and longer. Without it, you may find yourself spending thousands in major costly repairs, just like your portfolio! No matter your goals, having a professional review your retirement plan may potentially increase your growth or gain. At RGA, we offer complimentary second opinion sessions to evaluate your current plan compared to your goals. With the newly passed SECURE Act and ever-changing tax laws, retirement planning isn’t as simple as it once was. Nowadays, you’ll want a review, and maybe even a repair, every few years. Don’t wonder if your portfolio is working for you—get validation or a revamp! Click the link below, call 1-800-467-8152, or email info@ronaldgleok.com to schedule your complimentary visit. 

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