January 2022 came and you made your resolutions about your financial health. Get your spending in order, pay off your credit card debt and focus on making smart investments. Well it’s almost April and your checking account is still in shambles, interest charges are piling up and the idea of savings stresses you out.
Having your finances in order can affect your physical and mental health and is key to securing your future. Here are 5 ways to get financially fit!
1. Figure Out Where Your Money Is Going
Take a look at your spending patterns. If a majority of your money goes to eating out and shopping, it is time to reevaluate your spending. Create a budget for recreation and stick to it.
Once you establish where the holes are in your budget, you can use free budgeting apps to create budgets, track what you're spending and where you’re spending it.
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Once you see how all of your expenses are adding up, you can decide where you need to cut back and where you can afford to splurge a little.
2. Start An Emergency Fund
Saving for a rainy day really comes in handy when unexpected expenses come up. If you stay ready, you won’t have to scramble and pull from your savings or use your credit cards to keep yourself afloat.
Three months' worth of expenses is good but six months to a year is ideal. Be sure to put this money in a high-interest online savings account, a certificate of deposit or a money market account so you can let those savings grow over time.
Get Your Money Right: 5 Financial Health Tips
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3. Manage Your Debt
Identifying your debt and creating a plan to get rid of it is key when working on your financial health. Having debt can slow down your progress and make it even more difficult to save. But don’t get too discouraged, there is a way out. Review all of your outstanding balances and see if there is any way that you can make a large payment to cut down that debt. You can decide to pay the largest amount first or pay the debt with the highest interest rate, but be sure to develop a strategy that works best for you and include that in the budget that you build monthly.
4. Review & Understand Financial Statements.
When your statements arrive, look through them! Make sure you are reading through your statements to monitor any changes to your APR, fees or fraud on your account.
Bank fees can be avoided if you are aware of the actions that trigger them. Some banks impose monthly service fees on your account if you fall below a certain balance. Set an alert on your bank when you are getting close to that amount to avoid incurring those charges.
5. Create Short Term and Long Term Goals.
Make a list of things you want to save for in the next six months and in the next few years and set a plan of action on how much you need to save weekly to reach your goal.
Short-term goals can be a vacation, wedding and paying off credit card debt. Longer goals are usually ones that take several years to accomplish like paying off your mortgage, building a retirement fund or even starting your own business.
Take control of your financial health and set yourself up for a successful rest of the year by putting these tips to use.
Once you create a routine of saving and spending with intention, you will be in financial shape in no time!
There is no better machine to help you get financially fit than The Black Business School. Get help with the above five tips and also learn other ways to build your business and financial knowledge!
Written by: The Black Business School
