Similar to how a physical checkup may reveal elevated cholesterol levels, financial wellness visits can reveal opportunities for better financial habits - this may include tracking spending, automating savings plans and paying down high-interest debt as well as setting aside an emergency fund.
Starting small is often the key to improving our finances in 2019. Here are a few simple strategies for starting off right in 2019.
1. Check Your Credit Score
Your credit score provides potential lenders with a snapshot of your risk profile and helps them determine how likely it is that you will repay what they lend you. It is determined by reviewing information from Equifax, TransUnion, and Experian credit bureau reports about you.
A good credit score indicates to lenders that you are a low-risk borrower and may help secure loans or mortgages at more competitive rates, according to Schulz. Other factors affecting your score include how long you have had credit history, current debt levels and account types such as credit cards, retail or installment loans that make up the picture of who you are as an individual borrower. Checking your report regularly enables you to spot errors early such as someone opening an account in your name without your knowledge or an incorrect balance being reported by creditors.
2. Review Your Budget
Financial health is a holistic approach to money management that incorporates several key indicators, such as budgeting, debt management and savings. Regular checkups with an eye toward making adjustments as necessary can ensure your income is greater than expenses, savings are being built up steadily, credit card balances remain manageable and your emergency fund contains enough money for unexpected costs.
Reviewing your budget is crucial to ensuring your spending reflects your priorities and goals, such as identifying areas where overspending may have taken place. Furthermore, reviewing whether any savings have been set aside to meet financial goals.
3. Review Your Investments
Financial health involves optimizing your resources and meeting long-term goals with financial ease, including things such as having enough savings set aside in case a setback occurs.
Attaining strong financial health involves budgeting, automating savings and developing a plan to cut spending and debt. In addition, creating an emergency fund and investing regularly are also key. Furthermore, reviewing your investment portfolio periodically is also key for ensuring it meets both your risk tolerance and investing timelines; working with a financial advisor may assist here - they'll evaluate current portfolio holdings before offering recommendations to make necessary adjustments.
4. Review Your Insurance
Financial health checks can help you assess if you're on track with reaching your goals, as well as prevent lifestyle creep - when more income becomes available but more is spent than brought in.
An annual review is an integral component of financial health. A thorough audit can ensure your policies align with current objectives and wealth management strategies.
Review of life insurance needs should include discussion of beneficiaries listed, any necessary modifications and other potential options that might be available; an ERIE agent in your local area can discuss how they could fit into your overall strategy and what the potential benefits might be.
5. Review Your Taxes
Financial health can be defined as the state in which one has complete control of his or her money and doesn't let it control them. Achieving financial health includes maintaining a balanced budget, investing wisely and paying down debt while setting and reaching financial goals while adapting well to unexpected obstacles or hurdles along the journey.
Get into financial shape isn't difficult; all it requires are consistent habits. For example, checking and savings accounts each morning provides a real-time view of what's coming in and going out.
Taxfyle's review service can assist in detecting errors or discrepancies on your tax returns and uncover deduction opportunities such as Section 199A qualified business income deductions that will help avoid costly mistakes and potentially avoid an IRS audit.
