In a previous blog post, we discussed some effective strategies to help small business owners take control of their financial planning initiatives in 2019. For this next post, we wanted to focus on how individuals can manage their personal spending habits and debt and also improve their overall financial health well into the new year!
4 Steps to Improving Your Financial Health:
Step 1: Assess Your Current Financial Situation
Sometimes, it’s hard to admit the truth, but if you’re serious about improving your financial situation, you need to take a step back and assess how money is coming in, where it’s going out, and how you’re managing it. Are you paying off credit cards, student loan debt, or other monthly expenses? Are you only making minimum payments on cards with high interest rates? Are you paying for services or products you never use?
Be honest when reviewing your finances. Don’t leave anything out. While doing this, create an expense report to track everything. This will allow you to create a realistic picture of your spending habits and how you’re currently handling money.
Step 2: Identify Your Long-Term Goals
After you’ve assessed your current situation, it’s time to start setting goals for the future. Do you plan to retire? Good. Now, look at how you’re saving for your impending retirement years. Are you enrolled in an employer-provided 401(k) plan or a Roth IRA? Are you putting money into a personal saving’s account or Health Savings Account (HSA)?
Aside from retirement, are you planning to one day own a business, travel abroad, or send your children off to college? Planning for these long-term financial goals now is essential, and it’s better to have some guidance than go at it alone. At Focus Financial, we work with a variety of individuals and families who have different aspirations for the future, which is why they receive personalized financial planning strategies that are tailored to their diverse needs and goals.
Step 3: Make Saving a Priority
It’s always a good idea to have a savings account that you continually contribute to on a regular basis. If you receive a paycheck every other week, decide how much you’d like to transfer to your savings account and be meticulous about it. Having a healthy saving’s account safeguards you from the unexpected. Whether it’s losing a job, having a costly medical procedure, or repairing an old vehicle, you’ll avoid having to charge unanticipated expenses on credit cards with high interest rates, which can lead to accrued debt and bad credit.
Step 4: Know the Value of Smart Investments
In addition to growing your personal saving’s account, you also want to make sure you’re making smart investments. Investments can ideally turn into additional sources of income when managed correctly. Knowing how to make the right investments and whether or not to be conservative or aggressive isn’t typically taught to us when we’re young, so it’s better to speak to an experienced advisor about strategic investment management. This will provide the support you need to diversify your portfolio and stay informed on market fluctuations.
If you’re ready to take control of your finances and make 2019 the year you finally tackle your debt and manage your spending, contact Focus Financial today! We’ll help you design a plan that keeps you and your family on track towards achieving your goals in 2019 and beyond!