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Mastering Your Finances : Smart Ways to Help Boost Your Financial Wellness


Picture source : Smart Business Daily


When you’re juggling competing financial priorities, figuring out how to manage your spending, saving, and investing, you can feel overwhelmed. Fortunately, taking a few basic, but important, financial wellness can help you get a handle on your money today and put you on the path to financial fitness in the future. Financial wellness is a relative measure of how well a person manages their financial life. Improving financial wellness is about practicing better money habits, setting goals and taking steps to achieve them—all with the aim of improving your overall quality of life. From good budgeting practices and saving for the future, to estate planning and retirement planning, financial wellness involves understanding your needs and making plans.


Financial wellness is the process of developing healthy financial habits and being at peace with your finances, both present and future. It could include budgeting, eliminating debt, and investing. Taking the following steps can help reduce your stress and put you on the way to financial fitness.


1. Start with a budget

The first step to achieving your financial goals is knowing where your money is going. Budgeting gives you the opportunity to ensure that your savings and expenses align with your priorities. There are many ways to make budgeting easier. You can use a spreadsheet or pen and paper, and there are also apps and programs available to make work easier. When setting a budget, be sure to include your savings goals. The budget should also include a plan to reduce any debt. Once you have a clear idea of ​​your expenses, compare your expenses with your income and think about any changes you may want or need to make. Once you've set a budget, you should regularly monitor your spending to make sure you're on track to reach your goals.


2. Put away money for an emergency

When it comes to financial wellness, one of the most important steps you can take is to create an emergency fund. Set aside money in an emergency fund so you can deal with unexpected life events without impacting your budget or long-term savings strategy. While investing can be an effective way to increase your savings, you might consider keeping your emergency funds in a savings account, checking account, or money market account. These accounts can provide you with a lower risk investment and easy access to these funds when needed. If you need to use your emergency savings, make sure to add more money to your fund afterwards.


3. Make your saving automatic

One of the best ways to help you stay on track with your savings and investment plan is to make automatic contributions. Automation saves time and does not require constant work. So once set up, you can make progress towards your contribution goal with no extra effort. It also eliminates the emotions associated with investing, helping you stick to your plan despite the ups and downs of the market. Automation also removes the temptation to spend. Money gets delivered to your targets before you get distracted by enticing purchases.


4. Increase retirement contributions each year

When it comes to your retirement goals, saving as much as possible and starting as early as possible can be the key to success. If you fall into this category and cannot reach 15% immediately, it is important that you at least try to contribute enough to receive full support from the employer, then gradually increase the contribution. their own over time. Many career plans offer an automatic increase in your pension contributions by one or two percentage points each year. Since this increase is small and gradual, you may not even notice you're saving more, but it can make a big difference over time.


5. Take advantage of financial education and tools

You don’t need to figure out your financial life on your own—there are lots of ways to get help. For example, many employers offer financial wellness tools and training programs to help their employees set goals and identify specific, incremental steps toward achieving them. Some employers offer substantial financial assistance, including matching pension contributions, student loan repayments, tuition reimbursement for further education, and other benefits. Your employer is not your only choice. Many financial firms, including brokers and banks, offer free online training and tools.


Source : Forbes, T.RowePrice


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