Financial wellness can mean different things to different people. In general, though, it is a state in which you can pay your bills, cover unexpected expenses, and save for long-term goals like retirement. Achieving financial wellness can help to ease your mind and relieve money-related stress.
Most of us can stand to make at least some improvements in our financial wellness. These steps will help.
- Create a budget. A budget will help you differentiate between needs and wants, identify unneeded spending, and plan for short- and long-term goals.
- Build an emergency fund. If you can’t cover the unexpected costs that inevitably come up (car repairs, medical bills, etc.), it will be tough to gain financial ground. Most experts recommend setting aside three to six months’ worth of living expenses. If that seems overwhelming, aim for one month’s worth at first.
- Pay off credit card debt. Once you have an emergency fund, start to pay off any credit card or other high-interest-rate debt. One method is to begin with the debt that carries the highest interest rate, and pay it off as aggressively as you can. Then move to the debt with the next-highest interest rate.
- Save for retirement. The sooner you start saving for retirement, the more time your investments have to grow.
Keep your eye on the ball
As your financial worries ease a bit, it may be tempting to fudge on some of your financial wellness plans. By staying committed, you’ll achieve your goals and enjoy the lasting benefits of financial wellness.