Everyone knows the old adage: An apple a day keeps the doctor away. And while there may be some truth to this, we also know there are other steps involved in maintaininggood health — from exercising and eating right, to getting enough sleep every night.
The same can be said for your overall financial health — several things contribute to being financially healthy. Unfortunately, many Americans struggle with where to start. Research shows that 57 percent of Americans are struggling financially1, and 44 percent say they would not be able to cover a $400 emergency expense without selling something or borrowing money2.
That’s why it’s important to stay on top of your financial health. Just like visiting your doctor for a routine check-up, it’s essential for everyone to understand the daily financial decisions they can make to establish healthy financial habits.
Here are eight steps that can help you stay on track and can have a big impact on your financial health:
▪ Pay yourself first – set aside some income for savings, about 5 to 10 percent
▪ Track your spending – make sure you know where your money is going each month
▪ Create a safety net – build up emergency savings to cover 3-6 months’ of expenses
▪ Pay down your high-interest debt – pay down the debt that costs you the most
▪ Pay on time, every time – pay bills on time to improve and maintain your credit score
▪ Know where your credit stands – check your credit report annually
▪ Review your insurance annually – protect what counts by checking coverage annually
▪ Save for a better retirement –save at least 10 percent of your income each year
Each step moves you forward in your journey to betterfinancial health. These actions can help you make meaningful financial change in your life.
Like eating an apple a day, small habit-forming actions to support your financial health can make a big difference over time.
1. Center for Financial Services Innovation, Consumer Financial Health Study (March 2015)
2. FED Board of Governors survey (2017)