What does Financial Health mean to you?
Is it paying bills on time, robust savings, retirement fund, affording a new car?
Whatever financial health means to you, it starts with getting your finances in order.
It’s easy to think that keeping track of your account balances is all you need to do to stay on top of your finances. But that is no longer true. Today, accounts are spread across multiple financial relationships.
Where is your money going? To figure that out, you need to include savings and checking accounts, and credit cards. You also need to look at things like your Starbucks app, Apple / Samsung Pay, Amazon Prime, Netflix, Venmo, PayPal, and your retirement account. Suddenly you realize how challenging it can be to really stay on top of your finances.
Whatever financial health means to you, it starts with getting your finances in order.
It’s easy to think that keeping track of your account balances is all you need to do to stay on top of your finances. But that is no longer true. Today, accounts are spread across multiple financial relationships.
Where is your money going? To figure that out, you need to include savings and checking accounts, and credit cards. You also need to look at things like your Starbucks app, Apple / Samsung Pay, Amazon Prime, Netflix, Venmo, PayPal, and your retirement account. Suddenly you realize how challenging it can be to really stay on top of your finances.
Sustainable financial health requires a holistic approach – putting all the pieces of your finances together.
Create a work budget
A good first step is to look at how much is coming in and how much is going out.
Look at the full picture of your income by including salary / wages, bonuses, alimony, interest etc.
Now you need to fully know your expenses. Start by adding up your childcare, credit card, payments, mortgage / rent, food, utilities, insurance, etc. Remember to include your automatic payments!
Look at the full picture of your income by including salary / wages, bonuses, alimony, interest etc.
Now you need to fully know your expenses. Start by adding up your childcare, credit card, payments, mortgage / rent, food, utilities, insurance, etc. Remember to include your automatic payments!
With that done, you’ll have a better understanding of your finances.
Track your spending habits
It goes without saying that most of us need to pay closer attention to
what we spend. Being mindful of spending habits can help keep us on track to meet goals for retirement, savings, vacations, and even that new fridge.
Beyond your essentials, what do you spend on? Eating out, movies, travel?
what we spend. Being mindful of spending habits can help keep us on track to meet goals for retirement, savings, vacations, and even that new fridge.
Beyond your essentials, what do you spend on? Eating out, movies, travel?
Understanding your spending habits will help you plan your budget. It also helps you make sound decisions the next time you’re craving take-out.
Build and emergency fund
It’s not always easy to make savings a priority, even when we know how important it is. Even a small amount put away each pay period can add up over time. Even better, set it up as an automatic withdrawal. An automatic withdrawal into an emergency fund means you don’t see it and don’t need to touch the money – until you need it.
Being prepared for unexpected expenses can be a huge piece of mind.
Plan for the future
Now that you your have your finances organized, planning for the future comes next. What do you need for your new car, home, or retirement? How do you get there? With your budget fully in mind, start looking at how you can make saving for your future your priority.
Using a financial calculator can help you figure out what you may need for retirement. Retirement Calculator.
Success step-by-step
Your aren’t alone if you dread thinking about your finances. Trying
to look at the big picture all at once can seem overwhelming, so start by taking one step at a time.
to look at the big picture all at once can seem overwhelming, so start by taking one step at a time.
Step 1. add up income
Step 2. figure out expenses
Step 3. create a budget
Step 4. set up alerts and more to help track your spending.
Financial health is a process and there is no silver bullet – even winning the lottery doesn’t guarantee
4 Strategies to pay off credit card debt faster
1. Target one debt at a time
Do you carry a balance on more than one credit card? If so, make sure you always pay at least the minimum on each card. Then focus on paying down the total balance on one card at a time. You can choose which card you target in one of two ways:
Do you carry a balance on more than one credit card? If so, make sure you always pay at least the minimum on each card. Then focus on paying down the total balance on one card at a time. You can choose which card you target in one of two ways:
- Focus on high-interest debt
Check the interest rate section of your statements to see which credit card charges the highest interest rate, and concentrate on paying off that debt first. - Try the snowball method
With the snowball method, you pay off the card with the smallest balance first. Once you’ve repaid the balance in full, you take the money you were paying for that debt and use it to help pay down the next smallest balance.
2. Pay more than the minimum
Look at your credit card statement. If you pay the minimum balance on your credit card, it takes you much longer to pay off your bill. If you pay more than the minimum, you’ll pay less in interest overall. Your card company is required to chart this out on your statement, so you can see how it applies to your bill.
Look at your credit card statement. If you pay the minimum balance on your credit card, it takes you much longer to pay off your bill. If you pay more than the minimum, you’ll pay less in interest overall. Your card company is required to chart this out on your statement, so you can see how it applies to your bill.
- Quick tip
Pay a bit extra each month if you can. Every dollar over the minimum payment goes toward your balance—and the smaller your balance, the less you have to pay in interest.
3. Consolidate debt
Consolidating your debt lets you combine several higher-interest balances into one with a lower rate, so you can pay down your debt faster without increasing payment amounts. Here are two common ways to consolidate debt:
- Transfer balances
Take advantage of a low balance transfer rate to move debt off high-interest cards. Be aware that balance transfer fees are often 3 to 5 percent, but the savings from the lower interest rate may often be greater than the transfer fee. Always factor that in when considering this option. - Tap into your home equity
If you have equity in your home, you may be able to use it to pay down card debt. A home equity line of credit may offer a lower rate than what your cards charge. Be aware that closing costs often apply. - If you do consolidate, keep in mind that it’s important to control your spending to avoid racking up new debt on top of the debt you’ve just consolidated.
4. Review your spending
Start by categorizing your monthly spending, for example: groceries, transportation, housing and entertainment. Your credit card statement can be a helpful tool; many issuers categorize your spending. Look for areas where you can cut back. Then take the money you’ve freed up and apply it to paying down your debt.
Start by categorizing your monthly spending, for example: groceries, transportation, housing and entertainment. Your credit card statement can be a helpful tool; many issuers categorize your spending. Look for areas where you can cut back. Then take the money you’ve freed up and apply it to paying down your debt.
- Pay with cash
One way to manage your overall debt is to consider purchasing things with cash. Using cash or a debit card can help you avoid overspending or making impulse purchases—plus you eliminate any extra fees that may apply when paying with plastic. You’ll also have a clear understanding of how much is going out vs. coming in every week or month. - Use financial windfalls
Commit raises, bonuses or other financial windfalls to debt reduction rather than adding these funds to your monthly spending pool. Using this “extra” money to chip away at your debt can help you reach repayment goals faster.
What are the 5 factors that affect your credit score?
- Your payment history (35 percent)
- Amounts owed (30 percent)
- Length of your credit history (15 percent)
- Your credit mix (10 percent)
- Any new credit (10 percent)
Ways to improve your credit score
Check your credit report
Credit scores are based on the information in your credit report, so it's important to check for errors and correct them immediately. About 1 in 5 consumers find mistakes on their credit reports, and disputing them can help boost your score.
Pay your bills on time
Paying bills and invoices on time is a simple and effective way to improve your credit score.
Paying bills and invoices on time is a simple and effective way to improve your credit score.
Lower your credit utilization ratio
Your credit utilization ratio is the amount of credit you're using compared to your credit limit. As your credit utilization goes up, your credit score goes down, so reducing your debt can help boost your score.
Add positive credit history
Keeping positive credit information on your credit report longer than negative information can help you establish a history of good credit management.
Become an authorized user
Becoming an authorized user on someone else's credit line can show credit agencies that you're trustworthy.
Check your credit.
You have the right to request one free copy of your credit report each year from each of the three major consumer reporting companies (Equifax, Experian and TransUnion) by visiting