Good financial health is a goal for a lot of people, but sometimes it is difficult to know where to start. Here are 6 tips to achieve have healthy finances that will help you achieve your goals and plan for the future.
1. Spend less than you earn and get paid what you are worth
This sounds like basic common sense but many people struggle with this key rule for achieving healthy finances.
No matter what you make, you can never get ahead if you are spending more than you earn. Commit to spending less and saving the leftovers. This doesn’t always mean big sacrifices, just conscious spending. Little changes can make a big difference.
Getting paid what you are worth can be slightly more of a struggle. Make sure you know what the average salary is for your job and make sure to evaluate the worth of your skills in the marketplace. There are plenty of resources online to help you calculate what you are worth and lots of advice for approaching your manager about a raise.
The government run job bank website has a search function to show salary by both career and location.
2. Stick to a Budget
Sticking to a budget is another golden rule with which people often struggle. A budget is important because it makes you aware of where your money is going. If you pay attention you can notice where you are wasting money and alter your spending accordingly. Without a budget you will get to the bottom of your bank balance with no idea where the money went. Budgets can also help you set and achieve savings goals.
There are plenty of online resources to help you create and stick to a budget as well as many mobile apps. Shop around and find one that works for you
3. Pay Off Credit Card Debt
Credit card debt is the umber one impediment to good financial health. The interests rates are high and any leftover balance can increase exponentially. Keep track of what you owe on your credit cards and try and pay off the balance every month. In today’s society you need them to get around, but you don’t need to let them run your financial life.
4. Invest, save and contribute to a retirement plan
Planning for the future is a sign if good financial health. As well as savings you should have a separate retirement fund. A 401(K) is one of the best investments out there, so if you have the opportunity to pay into one, do so.
If you still have money outside of payments to savings and retirement, consider investing. You can talk to a professional about your options.
5. Review your Insurance
It is important to have enough insurance to cover financially damaging possibilities, such as critical illness. However it is important to review your policies and compare with the market. Many people are paying much more than they need.
6. Update Your Will
If you have any dependant it is important to have a Will that makes it very clear who is provided for and how. If you die without a Will your family may not be provided for as you would have wished, and they may end up spending a large amount of money in legal fees to try and sort it out.