Achieving Financial Well-Being
Tips for achieving financial well-being
Good financial health is like good physical health. You have to work at it regularly by taking a variety of steps all through life. The most important steps include saving, budgeting, planning for the future, and changing any habits that aren’t in sync with your goals. Here are some tips.
- Draw up a personal or household budget. Know how much money you have coming in, how much you can spend on necessities and luxuries, and how much you need to save to meet your long- and short-term goals. If you share finances with someone else, talk about the future together, and try to come to an agreement on your priorities for spending and saving.
- Make saving automatic. Make saving easier by having your paycheck deposited directly into your bank account and having your bank automatically move some of your money into a savings account. Try also to have some of your pay transferred into an IRA or other retirement or investment account.
- Have an emergency fund. Make it a top priority to put at least three months of expenses into an account you could draw on easily and avoid going into debt if you or someone in your family had a job loss, medical emergency, or other unexpected issue.
- Plan for the future. Go over your budget and financial goals at least once a year and anytime your life circumstances change. Plan for short-term expenses you will have in the next year, such as the cost of a vacation or home repairs. Review also whether you’re on track to meet long-term goals such as buying a home, paying for a child’s education, or saving for retirement. Develop a plan for changing any habits that aren’t helping you meet your financial goals.