Financial health often means very different things to different people. However, we generally agree that financial health includes being able to pay your bills on time, staying on track with your goals, and having emergency funds in your bank account in case of a setback.
Worrying is natural when your finances aren’t in a good place. However, when it turns into severe anxiety, it’s time for you to make adjustments to improve the situation.
The good news is once you start implementing good habits, your financial health will soon fall into place. To help you along, here are some tips, courtesy of TDPel Media.
Make a Budget
Create a realistic household budget — and then try your best to actually stick to it. True, adhering to the plan is the hardest part, but it’s essential in turning your financial health around. Making a budget will ensure that you:
- live within your means
- stay away from unnecessary debts
- achieve your goals faster
- spend within your priorities
- accomplish a healthy financial future
An excellent way of sorting out your finances when creating a budget is through the “50-30-20” budget method. This means that 50% of your income after taxes goes to life essentials; these bare necessities include rent or mortgage, food, utilities, insurance, and debt.
Meanwhile, 30% of your after-tax money would go to recreation and entertainment. This amount is optional and can be reduced when necessary. Things like yoga classes, Netflix, and vacations can be eliminated if they’re a stretch on your income. Lastly, 20% of your money (again, after taxes) should go toward savings and investments.
Clear or Reduce Debt
Before you develop a solution for dealing with your debt, compile a list of all your current loans. Go through your credit report and bank statements and note down any recurring debts. Double-check your emails to ensure you’re not missing any subscriptions.
Your budget should include a solution to reducing your debts. For instance, getting a second job is an excellent way to supplement your income and build up savings. You’ll be making more money, hence clearing your debts a lot faster. If you are clear of any loans, below are great ways to avoid getting into debt:
- Spend within your means
- Avoid impulse buying
- Always pay with cash
- Build an emergency fund
- Compare prices when making costly purchases
- Avoid “buy now, pay later” type of financing
Find a Passive Means of Income
Passive income refers to earning money from an enterprise with which you are not actively involved. Finding a passive means of income will help you accomplish financial health while still focusing on your job and day-to-day activities.
Ensure that you carry out thorough research before investing in anything. Additionally, pursuing passive income could lead you to start your own business or side hustle and become your own boss. The advantage of starting a business is that you can do it while still working your nine-to-five job. However, you’ll need to select a business structure and register with the state. For example, an LLC provides benefits like limited liability, less paperwork, tax advantages, and flexibility. Be sure to check the regulations around forming an LLC in your state.
Seek Professional Help
When it comes to financial stress, getting professional help means both financial and psychological help. You can research financial resources online using platforms and get the help you need. Additionally, financial stress can be much more difficult to deal with if you’re already struggling with anxiety or bipolar disorders, so don’t forget that a mental health professional will help keep your mental well-being in check and assist you in avoiding any breakdowns in the future.
Have an Emergency Plan
As we work on dealing with the mental issues brought by financial stress, we must look into its triggers. Being unprepared is one of the main issues that lead to financial stress. Your budget must include at least six months of living expenses in a bank account. Automate saving is perfect for putting emergency funds aside, this means setting up an automatic transfer from your checking account to your savings account each month.
Conclusion
Being able to achieve financial health is a step toward financial freedom. The process can be overwhelming, but with the tips provided in this article, you’ll be able to do it.
TDPel Media is an online news and interview publishing platform. TDPel Media covers general news worldwide, politics, business, entertainment, environment, technology, lifestyle, culture, comedy, health, religion and others. If you have any questions or suggestions, please email tdpelmedia@gmail.com.
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