In a 2019 study on Financial Health, less than one in three Americans were considered “financially healthy”. And that is prior to 2021! I can only imagine what that number is now. If 2021 has you doubting your financial health or if you’ve never had it, these 5 steps can help you improve it.
#1: Determine where you’re starting from. If you want to reach a goal, you have to know where you’re starting from. Figure out if you’re a saver or a spender or a little of both. Self-awareness is key to know where you’re starting from. Then you can shift your mindset to help you reach financial health.
#2: Tell your money where to go. You have to be purposeful with your money. A budget is the best tool for this, of course. This will allow you to take control of your money and tell it where to go instead of wondering where it went each month.
#3: Start spending less than you earn. 78% of Americans live paycheck to paycheck. Think through and identify your basic needs and how to make progress to reach your financial goals. You can have some of your wants, but not confuse a want with a need.
#4: Plan for your future. Nothing will make you feel more financially healthy than a fully funded emergency fund. When you have money set aside for emergencies, it takes the stress out of them and gives you peace of mind.
#5: Become a generous person. The act of giving back changes your relationship with money. This keeps your money in the proper perspective and allows you to bless others. Generosity is a sign of someone who is truly financially healthy.