4 Tips for Improving Your Financial Health
Would you like more money in your bank account? Money is a huge part of our lives. It affects every decision we make, from our style to our meals. If you’re not earning enough, it can be difficult to feel stable or follow your dreams. With some effort and focus, you can improve your financial health and have more control over your life. The tips in this article are designed to help you make smart decisions about your finances and feel good about the future.
1. Track Your Spending
Most people start budgeting by writing down what they plan to spend in a particular time period. Then, they’re surprised when their intentions are derailed.
If you don’t know what you’re spending now, how can you make a plan to change your financial habits? Your forecasted budget may be way off, making you feel like you will never reach your goals.
Monitor your normal spending habits for a month. You’ll end up with an accurate starting point for budgeting. Plus, you’ll have a clearer picture of the expenses that you can cut.
2. Make a Budget That Works
You can’t be financially stable if more money goes out than in. Now that you have spent time tracking your spending, list your expenses and all income sources.
Start with monthly recurring expenses like housing, utilities, groceries, and childcare costs. Then account for discretionary purchases including entertainment, restaurants, takeout and personal care items. Does your income cover it all? Be honest.
If you have more going out than coming in, find ways to reduce spending or increase income. Explore financial tools to cut high interest rates or provide discounts when you purchase necessities.
3. Build Wealth for the Future
You’ve heard it before; put money aside for retirement. That can be challenging when you feel like you need to make ends meet right now. Your budget will help resolve your current issues.
Set yourself up for financial stability in the future by:
• Staying out of debt
• Maintaining a decent credit score
• Putting even a small amount of money aside regularly
• Investing extra funds that will grow as you do
4. Be Generous With Your Money
It seems contradictory that giving money away will enhance your financial health. After all, you just realized that you might need to cut your spending. But giving activates the reward centers in your brain. It enhances your happiness, which helps you maintain your physical and mental health, relationships and motivation.
Perhaps that boost will make you more productive at work or motivated to save those extra dollars instead of going out to dinner again. If you’re healthy, you’ll spend less money on medical bills. If your relationships are healthy, you may save money that you’d otherwise spend on interpersonal counseling. If you are motivated, you will continue to actively seek to better your life.
It’s a cycle. Putting abundance into the world can in turn help you feel like wealth is more accessible to you. That feeling alone may encourage you to make decisions that further your financial freedom just because you believe that it’s possible.