Four Steps to Financial Well-Being

Track Cash Flow: You work hard for your money so don’t let it dribble away. Start by looking at essential expenses such as rent/mortgage, automobile payments, insurance, utilities and mobile phone charges. Next look at expenses that don’t come as a monthly bill, such as gasoline, groceries, clothes, and entertainment. Choose a tracking method that works best for you whether it is an app or paper budget.

How does income compare to expenses? If you have a deficit, are there non-essential expenses that can be cut without affecting quality of life?

Automate Saving & Investing: Dedicate a portion of income for short and long term goals. Use direct deposit to send money to a savings account and retirement account. Set an amount that you can realistically avoid tapping for regular expenses. As you increase financial stability, increase the amount dedicated for saving and investing.

Pay off Credit Card Debt: Credit card debt can be an expensive and unproductive debt. When you carry credit card debt month-to-month, the grace period disappears and the interest meter is always running. The most cost effective use of credit cards is to pay the balance in full every month. Understand that paying credit cards balances in full does not negatively impact your credit score.

Evaluate Spending Decisions: We are constantly bombarded with messages to buy a wide variety of products and services. Track how often you make impulse or unplanned purchases. Evaluate whether these purchases or services provide value and lead to happiness.