Are you financially healthy?
That’s a loaded question, isn’t it?
Most people, no matter how much money they have, worry that they’re making sound decisions and have properly protected themselves and their families.
Being financially healthy means making some choices. And it probably means sacrificing some short term wants to make sure your long-term needs are met and protected. But it’s all possible, if you create a plan and then just work the plan!
Short Term Goals
These are the things you should take care of immediately or as quickly as you can. Your goal should be to put a check mark next to each of these items within 12 months.
Have a core checking account: This is your command center, whether you still write paper checks, use a prepaid transaction solution or do everything online.
Build an emergency fund: You should put at least $1,000 in a savings account that is linked to your checking account for fast and easy access.
Be ready for a longer-term emergency: Have 3-6 months of your living expenses saved and in an interest bearing account. This will protect you in case your income is interrupted for a period of time.
Protect what matters: Be sure you have the right types of insurance (health, life, home, auto etc.) and have the right coverage amounts. You should re-evaluate this annually with your insurance agent.
Complete your will: Many people put this on the “some day” list. Don’t put your family at risk – get it done. Ask your attorney if your situation calls for a trust as well.
Long Term Goals
These may take a while to complete but you’ll never get them done if you don’t get a plan in place. In some cases, you may need to seek outside assistance to identify the best ways to accomplish these goals.
Eliminate debt: If you have credit card or other debt, it’s an anchor weighing you down. Use the debt snowball method to reduce those balances in a hurry. Set your goals and save: Everyone has dreams of what they’d do if they had more money. It might be saving for a vacation or replacing those leaky windows; or it could be saving for retirement or helping a child pay for college. Put a plan in place to methodically make those dreams a reality by creating a goal-based savings plan.
Max out your retirement: If your workplace provides you with a 401K or other retirement savings tool – max it out to build the future you want down the road. If your employer matches part or all of your contribution – all the better!
Pay off your mortgage: Many people dream of owning their home outright and you can do it. By simply making one extra mortgage payment a year, you can shave years off your mortgage.
Build wealth: Imagine actually having more money every month than you need. That’s when you can start investing and let your money work for you, growing to provide for you down the road