Your financial health is just as important as your physical and mental health. Money affects almost every aspect of your life and can be the determining factor in many of your day-to-day decisions.
Being financially healthy isn't just about how much money you have in the bank. It also encompasses your financial capability and your attitude about money. This includes how you feel about money or how money makes you feel.
You can determine your financial health by reviewing your bank balances for a self-check. This can also provide insight about your relationship with money. Start by reviewing where your accounts currently stand, including the statuses and balances. The balances in your accounts can be used to calculate your net worth, which is a numerical indicator of your overall financial health from an accounting standpoint.
Also, consider your feelings and relationship with money, including the emotions you experience when someone brings up topics involving money. Take stock of your bank accounts and your money habits, and determine if you're a saver or spender. Understanding your habits in regard to how you manage money, and how you feel about your finances, as well as why you have these feelings can help you improve your overall financial health.
Next, get on track to managing your money better with the following tips from the financial experts at Greenwood, a financial services company helping Black America build generational wealth:
Set Financial Goals
To improve your financial health, start by setting short-term, mid-term and long-term financial goals. Use the S.M.A.R.T. method to ensure your goals are specific, measurable, achievable, relevant and time bound.
S.M.A.R.T. goal setting can help you become clear about how much money you want to save, while measuring your progress. It entails creating a plan to make your goals more achievable, as you align your goals with other objectives. You'll also establish deadlines for achieving your financial goals. Setting deadlines can help you stay focused on what you desire to accomplish in the shuffle of day-to-day life.
Create a Money Plan
A money plan is a guide that details how you want to use your income monthly. This plan should include the money you want to save and the money you want to spend. As you list your expenses, use this opportunity to review where your money is going and whether your spending is in line with the financial goals you've set. This is also an opportunity to look for ways to reduce or eliminate overspending. This will ensure your money is used for things that are important to you, like saving for a down payment on a car or home, or purchasing an item from your wish list.
Expand Your Financial Knowledge
Explore ways to become more comfortable with money and take control of your financial future. Your relationship with money and how you feel about it make up your money story. Money stories involve emotions, beliefs and experiences with money from childhood to adulthood. Start by spending 10-20 minutes each day exploring topics around money or personal finances to help build your knowledge base. You can do this by listening to podcasts, reading books about money management, browsing reputable personal finance websites or exploring financial education resources provided by your financial institution.
If you need a more personalized approach to developing a better relationship with your finances, explore working with a financial coach. Your financial coach can work with you on a range of fundamental money management skills. For example, a financial coach can help you overcome financial anxiety or come up with a debt repayment strategy. The coach can help guide, teach, empower and challenge you to grow into a savvy money user.
When determining your financial health, remember personal finance is personal. The money decisions you make today impact your overall financial health. Determine what financial success looks like for you and incorporate mindfulness, learning resources related to money, and other beneficial strategies to help improve your relationship with your finances.
Find additional advice and resources to help you manage your money better at: gogreenwood.com
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