If you feel like you’re losing control over the well-being of your finances, there are certain practices you can incorporate into your life. It will not be an overnight fix, but if you are consistent with these strategies, you should begin to see the results you seek.
Much like the physical and mental well-being of your body, your financial well-being needs to be worked on daily. Often, when the control over your financials begins to slip, your mental health can take a dip as more stress naturally forms. Ultimately, your quality of life will be greatly improved when you ensure that your fiscal responsibility is well taken care of.
Financial Health Explained
Before we get into the helpful practices to incorporate into your life, it is important to put a clear definition to someone’s “financial health.”
To put it simply, it is the current state of your finances. The various factors that make you happy with, frustrated with, or even okay with your financial situation directly correlate to the satisfaction of your financial well-being.
Continue reading to learn how you can gain more control over the health of your finances.
- Budget, Budget, Budget
- Create a Safety Net
- Avoid Debt as Much as Possible
More times than not, a dipping financial health can be connected to poor money management skills. Budgets are great to set financial guidelines to follow. It will help teach restraint and responsibility to not overspend and pay off any debts in a timely manner.
You can start by sitting down and examining on average how much you earn, and how much you spend. Primarily, determine how much you spend on necessities (groceries, rent, utilities, gas), and how much you spend on luxuries (streaming services, eating out, food delivery, clothes).
If you are self-employed, it is a great idea to generate custom paystubs to help accurately keep track of income and taxes. Then make a spreadsheet or any other program of your choice to clearly outline each month’s earnings, spending, and savings.
Create a budget that will create gradual cuts. It’s like coffee, if you’re used to drinking three cups a day and are trying to cut back, you are more likely to fail if you instantly drop to zero cups instead of weening off. If you’re using Door Dash three times a week, try your best to cut it down to only two for a couple of weeks.
This goes hand in hand with creating a budget but needs its own step because of its importance. You can be doing such a good job following your new budget month to month and feel so proud of yourself, but then out of nowhere, your car’s transmission fails…
This can be extremely expensive to repair and if you are not prepared with a financial safety net, this can seriously set you back on all your progress.
Every paycheck, determine how much money to deposit into an account specifically allocated to emergency funds. When figuring out your monthly budget, dedicate some time to figuring out the amount and how often you do it (an easy tip is every paycheck).
Your credit score has a high impact on your financial well-being. Of course, some credit debt is good as it shows you are using it while also consistently paying it down. However, maxing out or exceeding your credit limit will send your score into a dive bomb.
To avoid the stressors that are associated with the complex world of credit score maintenance, it’s good to practice these key strategies:
- Don’t miss a payment
- Be on time with that payment
- Don’t max or exceed the credit limit
- Leave at least 50% – 75% of credit open in case of an emergency
- Pay above the minimum payment due
Tax season is a time of stress and anxiety as everyone is filing their taxes, hoping everything is accurate so the IRS does not come after them. Getting that tax return check can be a big moment for people as they can use it to pay off debt, save some extra money, and even treat themselves or their family to a fun time.
Ensure that your financial health is protected in two ways: you earn that beneficial tax return check, and you aren’t audited by the IRS. Providing inaccurate information can jeopardize both of those preferred outcomes. If you are self-employed, take advantage of check stub generator software. Rest assured that all paystub tax calculations are 100% accurate no matter what state you are located in.
Check Stub Maker can help you stay on the road to a successful, healthy financial well-being.