(STL.News) Many of us invest significant time and effort into improving our mental and physical health, but it’s easy to overlook the importance of good financial well-being. While there’s more to living a happy and healthy life than making sure you have enough money in the bank, poor financial health can have a direct impact on your overall well-being. The more you find yourself struggling with bills, debts, and other common financial concerns, the more likely you could suffer from higher levels of stress, anxiety, and depression. Fortunately, just as you can take steps to improve other aspects of your health, you can also implement strategies that will make your bank and financial accounts healthier too. Here are three top tips to get you started.
Have a Clear Plan for Debt Management
The chances are that most people will need to access a loan or some form of financial assistance at some point during their lives. Debt is a common part of life for most people, regardless of whether you’ve borrowed money for a new car, a home, or even to get your education. Used correctly, loans can be a valuable tool, capable of helping us to take the next step towards our goals.
However, they can also be a significant source of stress and strain if you don’t know how to handle your debt correctly. That’s why it’s so important to have the right strategy in place. Rather than just ignoring your debts and setting payments to go out on autopilot each month, regularly evaluate your situation and ask whether you can make any improvements. Simple changes like refinancing old student loans into new loans can be an excellent way to increase the amount of available income you have left over each month.
Develop a Savings Strategy
For many struggling to make ends meet on a day-to-day basis, saving can feel like a luxury you simply can’t afford. However, few things are more critical than a savings account if you want to be in good financial shape. Depending on your situation, you may have numerous goals you want to save up to achieve at some point in your life. However, before you start working on those specific targets, it might be a good idea to start with a basic strategy for building an emergency fund.
An emergency fund ensures you’ll always have extra cash to tap into in the case of an emergency, such as when an appliance breaks down, or you find yourself without a good source of income for a few months. There’s no one-size-fits-all strategy for developing an emergency fund. However, most experts recommend having at least three months’ worth of wages to tap into. So start putting a small amount of your income aside each month as soon as you can.
Create a Budget and Use It
Ask virtually any financial expert what their top tip is for ensuring good financial health, and they’ll often say budgeting. While budgeting isn’t something most people enjoy doing, it is a valuable way to ensure you’re making the most out of the money you earn while working to eliminate waste. Creating a budget that gives a specific purpose to every cent and dollar you earn ensures you know exactly what you’re going to be using your money on each month.
The right budget can prevent you from making impulse purchases you’re going to regret later. It can also help you to pinpoint opportunities for saving you might otherwise overlook. Examining your monthly expenses to create a budget means you can see whether there are any unnecessary expenses eating into your available cash each month, such as subscriptions you no longer use or hefty food and living costs. Once you have your budget, commit to regularly updating it and ensuring it still works for you. Every time a major change happens in your life, you should adjust and adapt your budget accordingly.
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