The global health community is packed with people who care about others. They’re willing to put in extra hours to ensure people’s health and care come first. But that can mean putting their own financial well-being second. With half of all Americans, including healthcare professionals, reporting living paycheck to paycheck, according to CBS News, these 5 tips are an essential first step toward living a better, healthier financial life.
Set up Automatic Savings
When you set up automatic savings from every paycheck to a special savings account, those dollars can really add up fast. Yes, you might notice the reduction in your overall budget at first, but by the time a year has passed, you’ll be glad you did it.
By setting up auto deposits, you can:
- Reduce the temptation to spend the money
- Earn interest on every dollar in your savings account
- Reduce financial stress
- Reach your financial goals
Establish a Budget
A budget is an official (yet always evolving) list of expenses. The goal is to keep the total of those expenses less than your take-home pay. Once you create your budget, remember that it is not set in stone. You can add and remove expenses from the budget as needed.
What you need to create a budget:
- Your total household income (after taxes)
- Total monthly expenses (including rent/mortgage, car payments, insurance, food, etc.)
- What you spend on entertainment (includes dining out, movies, concerts, streaming services, and more)
- What you pay yourself (automatic savings, retirement)
Use Credit Wisely
Credit is a necessity in today’s world. But using too much credit can be financially troubling. Smart credit usage means using less than 30% of your overall available credit. If you have a credit card with a $1,000 available limit, don’t charge more than $300 to the card.
Other smart credit tips include:
- Pay the total balance on your credit cards every month (if possible)
- Pay every bill on time, every time
- Avoid opening too many accounts
- Check your credit annually at annualcreditreport.com
Establish Financial Goals
Whether it’s buying a house or working toward retirement, reaching your financial goals means starting the process toward those goals. First, identify a goal, give that goal a timeframe (when you want to reach it), define the ways you will reach that goal, and then make that goal a priority in your budget.
Top tips to reach any financial goal include:
- Setting a specific goal, such as “saving $20,000 for the down payment on a house”
- Track the progress of your goal and know when you should reach it with regular deposits or payments
- Set a clear deadline and stick to it.
Reduce Your Overall Debt
Paying off debt frees up more of your overall income. You can then put that money toward savings or other financial goals. Instead of paying up to 10% on a loan, you could put that money into savings and earn interest. Plus, when you free up those monthly payments, you open up your overall budget. What could you do with the money you spend on your auto loan every month?
Ways to reduce debt include:
- Pay more toward your debt every month
- Negotiate balances with creditors
- Don’t open new credit accounts
Boost Your Financial Wellness
More Financial Wellness Matters blogs on topics ranging from financial self-care to protecting your financial health are coming soon. Twice a month, we’ll dig a bit deeper into the relationship between financial health and overall well-being, shedding light on the behaviors and beliefs that drive money relationships. With simple tips and proven insights, we hope to enhance your financial well-being and help you live a healthier, happier life.