Get Your Financial Health In Shape
Exercise, eat healthy and get a yearly check up are all a part of maintaining your physical health but how many of us give equally as much thought too our Financial Health?
It’s just as important but many of us are doing a poor job at it. If your desire is to develop a healthier financial life then you should start by giving yourself an honest critique of how well you manage your money.
At the core of great Financial Health is great money Management skills.
What is Money Management?
Seems like an easy enough definition to come up with but theres a good chance that upon searching you will find several different point of views, all of which are probably correct but at the same time somewhat incomplete if you are not using a combination of them all when formulating your financial workout plan.
Before I explain, did you know that money management is a well-known term used heavily in the world of gambling? Some players in the gambling scene understand money management as being a type of betting system that they hope will give them an advantage at winning against the “house”.
Others refer to the term as a way to describe how they manage their bankroll. The way in which a gambler handles their money in the casino determines directly whether or not they will have enough money to last the duration of the gambling session.
A player who uses good bankroll management generally has a better chance of controlling the amount of money they put at risk during the playing session. This allows the player to play longer on a single bankroll.
Now if I may, lets bring this concept full circle and make the correlation between these gamblers and how you manage your money everyday. I know some of you were starting to get a little worried as to where this was going.
Well, the correlation and sad truth for so many of us, is that we are guilty of managing our on personal finances in somewhat the same manner as these gamblers do. What is even more disturbing is that they probably do a far better job of it than most of us.
Many of us approach our financial future with both eyes closed, we put little effort into tracking are hard earned dollars. We make the money and then we spend it and in the process we “bet” that things will work out financially for us in the long run.
We leave it to chance that are credit cards will get paid off eventually, and we leave it to chance that we will have the money to make the repairs on are new home we just purchased, and the most important risk of all that we leave to chance, is that we have properly prepared for our retirement.
Do any of these chances sound familiar, if not we can go on because there are so many financial aspects of our lives that we leave to chance. The way in which you manage your money during the most productive years of your financial life will directly determine whether or not the later years of your life will be comfortable and secure or financially unstable and full of doubt.
Developing sound money management skills will ensure that you get the most out of your money so that your dollars are working just as hard for you as you have for them. Becoming a good sound manager of your money doesn’t require that you do just one or two things but rather you must develop the ability to make wise decisions concerning all areas of your financial life.
Here are a few suggestions of where you can start making changes in your financial life. Some are very simple and others will be a little more tasking but when done together these habits will help you establish a healthier relationship with your money:
- Always pay your bills on time to avoid being charge the late fees…they can add up!
- Send more than just the minimum payment on your credit cards in order to get them paid off quicker.
- Check your bank statement activities daily.
- Establish an emergency fund consisting of a minimum 3-6 months living expenses.
- Prepare a will to protect your heirs legal claim to your financial holdings.
- Once a year compare your current insurance premiums with competitor rates to make sure you are getting the best deal.
- Create and follow a monthly budget.
- Check your credit report at least once a year for accuracy. You are entitled to one free copy from each credit reporting agency every year. (AnnualCreditReport.com)
- Establish and contribute the maximum amount to a personal retirement account.
- Always comparison shop rates, terms and conditions when applying for a mortgage or refinance.
Incorporating these changes into your financial life, where appropriate, will put you on the right track towards establishing sound money management skills and a healthy relationship with your money. A healthy relationship with your money means a healthier lifestyle with less stress and worry and more time to contemplate and participate in those things that truly give your life value.
These changes will also help jump start your development and ability to make wiser decisions when faced with other money matters like Budgeting, Banking, Credit Management, Taxation and Investment.