If your financial situation is in need of some serious help, you’re not alone. The good news is, you can make plenty of immediate changes to be more financially healthy — and most only require you develop a few simple habits. Here are some financial health tips to get you started.
Start saving now, and set good goals
Start saving now — the sooner the better. You can start small, but the act of placing money into a savings account is instrumental to becoming financially healthy. Your money will, over time, grow with interest and could be put toward a number of financially sound goals, including savings, debt, buying a home and more.
Pay your debt smart
Paying off debt is crucial to your financial success. You don’t have to do it immediately, but you can take certain steps to pay it off quicker and with as little interest as possible. Many money experts recommend the snowball method, in which you rank all of your debt in order of interest rate, from highest to lowest and then prioritize the debt with the highest interest rate, while still paying the minimum on all of your debts, in order to pay less over time.
Automate your finances
Take the stress out of your finances by automating certain financial responsibilities. Determine how much money you can save each month and set up a direct deposit for your savings account. You won’t have to remember to schedule a transfer each time and, if you really need the money back, it’s still easy to access. You can do the same with some bills and your 401(K) accounts, but be smart about how much you set up to automatically transfer because these payments and deposits will be more difficult to take back.
Keep an eye on your credit score
Your credit score is another important aspect of a healthy financial situation because it helps determine your ability to get a loan and what rate it will have. The FICO score, which are in use today by the vast majority of lenders, fall within the 300-850 score range. The higher the credit score, the better financing options and rates you have. The good news is that if you find out your credit score is on the lower end of the spectrum, it’s not stuck there. By carefully monitoring your score, paying off debt and making other smart financial decisions, you can raise your score and get better deals on things like home and car loans.
Track your spending
If you want to be an all-around financially healthy person, you’ll need to commit to tracking your finances on a regular basis. While that might sound intimidating, your bank should offer a money manager system to help you with the process. It will let you track your long-term savings goals, monitor all of your financial accounts, visualize your spending habits, track your net worth month-to-month and more.