Financial Education
They say money can’t buy you happiness — but not having to worry about money might help. A recent study by Guardian Life Insurance found that most American workers feel their overall well-being is more impacted by their financial wellness than any other factor. In addition, money was cited as the No. 1 source of stress for most workers. So how can you boost your financial happiness, and in turn, your emotional happiness? Here are a few basic money habits you can implement to help.
Know your financial standing. You can’t have financial happiness if you don’t even know where your finances stand. Regularly check in on the status of your savings and checking accounts, loans, credit card transactions and other financial accounts. When possible, sign up for email alerts, text alerts or app notifications to stay updated automatically.
Have a safety net. You shouldn’t feel like you’re one emergency away from being in deep debt. Starting up a savings account dedicated specifically to paying for emergencies is financially smart and can give you priceless peace of mind. Try to save about three to six months’ worth of living expenses in this emergency fund — enough to sustain you if you were unable to work. You don’t need to save it all at once. Try putting away a small percentage of every paycheck into your emergency fund and you’ll slowly but surely have enough saved. You can simplify the process by setting up automated savings that moves a set amount of money into your savings on a regular basis.
Make a budget. Do you ever want to buy something, but wonder if you can afford it? Eliminate the uncertainty and guesswork by creating a spending plan. To make one, write down all of your monthly expenses including bills and living expenses. Next, write down your monthly income. Finally, subtract expenses from income to get your discretionary spending budget for the month. At the beginning of the month, look at your budget and decide how it will be spent. Keep this budget in mind throughout the month by creating shopping lists and sticking to them.
Save for your retirement. If you’re working full time and not yet saving for retirement, try to start as soon as you can in order to secure your financial future. Saving early on allows your money to grow with the power of compound interest — meaning the interest that’s added to your nest egg accrues interest itself. Many employers offer 401(k) retirement plans in which money is automatically taken from your paycheck and added to your 401(k). Some employers will even match your contributions up to a certain percentage of your salary. Whether or not your employer offers a retirement plan, you can also open an individual retirement account (IRA) and make contributions to it.
Let us help boost your financial happiness. Financial planning can be intimidating to handle by yourself. Fortunately, our experienced PeoplesWealth Advisors are here to help. We can educate you about financial planning basics and set you on the path to financial success. Contact us today!