Just like the body thrives on health, so does your life on financial wellness. With that in mind, here are some tips we compiled for you to keep a healthy relationship with your finances.
- Keep a budget. There’s a reason that Suze Orman and all other financial gurus talk about budgeting – it’s because NOT having a framework for savings and spending is like walking through a forest without a map. You won’t get to where you want to go without lots of redirects. Ask yourself where you are, where you want to be, and what you can afford in order to get there. It also helps inspire you to bring in more income if you are seeing some gaps in your budget.
- Monitor your credit score. It’s fairly easy to set up a credit monitoring alert these days through one of your major credit cards. Alternatively, you can sign up for a service like Credit Sesame and have access to a dashboard display of all the 3 major credit bureus information on your credit profile. If you are in credit catch-up mode, we recommend using a more comprehensive service and paying all of your debt down as soon as you can. This is key to having a healthy relationship with your finances.
- Save 20-50% of your income, if you can. If you want to really be financially competitive, you can save 50% of your income and zoom past others in your income bracket that don’t have the dedication to their financial health to save so much. At least, try to save 20%; think of it as paying yourself first. You pay so many other people every month – why not pay yourself and sock it away for a rainy day.
- Invest. Over the long run, stocks tend to outperform other asset classes which is why it’s a good reason to diversify your assets into some stock holdings. A qualified financial advisor can help you pick a diversified portfolio or fund lineup to suit your risk tolerance and investment objectives.
- Have an emergency fund. Before investing in stocks or any alternative assets, make sure you have at least 6-9 months of emergency savings for basic living expenses. People get sick, laid off, and have other unexpected demands on them. Having a buffer will help your financial wellbeing and attitude to your finances.
- Plan for the long term. Marketing can be very clever and impulsive purchases can wreak havoc on our long-term financial planning. Keep this in mind when you go shopping and create your budget. Most people find vacations and making memories are far more important than the things we acquire in life.
- Keep an extra stash for unexpected medical expenses. Sickness or a terminal illness is unpredictable and can host hundreds of thousands, if not millions, of dollars. Even with insurance coverage, treatments to stay alive can consume all of your income and savings. At McClure Wealth, we recommend keeping something extra aside just in case.
As always, reach out to us at McClure Wealth if you would like to schedule a financial planning session with one of our financial advisors. We will review your entire portfolio and estate to determine how diversified and on track you are for retirement and your future life goals. We have been in business for over 25 years and pride ourselves in working closely with clients to train them to have a healthy relationship with their finances.
Don’t wait for your financial future. Call us today.