Five Healthy Habits for Financial Wellness
Insights from experienced financial professionals.
Financial stress can have a direct negative impact on a person's health and happiness. Unfortunately, this may lead to a downward spiral. The more stress you're feeling, the larger your financial hurdles may seem, and the more you may rely on unhealthy stress-reducing habits. Fortunately, there are steps you may be able to take to improve your financial situation and help manage money-related stress. Below are five habits you may wish to adopt to work toward financial wellness.
Set a Spending Plan
For many, the word "budget" is tantamount to the word "diet" and may imply everything from deprivation to falling short of unattainable goals. Facing the cold hard numbers, whether on a scale or in your bank account, may be a scary prospect. Instead, think of a budget as a spending plan and you may work to set realistic goals, allocate your money, and assess where you stand.
There's no one-size-fits-all rule for spending plans, though all should take factors into account like your age, income, earning power, expenses, and future housing and family plans. A spending plan for a single person in their late 20s in heavy debt paydown mode may look different from one for a couple in their late 40s with several teenage children. But once your spending plan is in place, it may continue to be modified and adapted to work with changing circumstances.
Automate Your Transactions
Taking advantage of automatic payment options may help eliminate much of the work associated with budgeting and bill paying. You may also automate your savings, whether scheduling a twice-a-month IRA contribution, putting a portion of each paycheck into a linked savings account or setting aside a monthly ACH transfer to your child's 529.
However, automated payments only work when you're organized enough (or have the extra cash flow) to ensure that there's always enough in your account to cover the withdrawals. With today's technology, it's usually simple to calendar these automatic payments when you set them up to stay on top of what's coming next.
Organize Your Financial Life
Whether you've opted to go paper-free with your finances or still maintain paper copies of bills, mortgage payments, or other records, it's important to keep these records organized and easily accessible. This may endear you to your tax preparer when Tax Day rolls around, but it may also allow you to more easily track your progress and determine your next financial steps.
Create a Long-Term Plan
Where do you see yourself financially in the next 10 years? 20? At retirement? If you've found yourself engaged in the financial equivalent of treading water for the last few years, it may be time to engage in some self-reflection on your long-term goals and priorities.
Find a Financial Professional
If you've been waiting until you feel more financially secure before making an appointment with a financial professional, you may be looking at things backward. A financial professional may help you conceptualize your goals and identify strategies to use to pursue them. Whether you need some advice on tackling debt, purchasing a house, investing for the future, paying for college, or funding long-term care in retirement, getting this advice from an experienced, trained professional may be money well spent.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This material was created for educational and informational purposes only and is not intended as investment advice. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy. This article was prepared by WriterAccess. LPL Tracking # 1-05205821