BMI Federal Credit Union
10 Tips to Chart Your Course to Financial Wellness
Navigating your personal journey to financial wellness does not have to be complicated! It begins with taking ownership of your finances. You are fully capable of being the captain of your financial ship. Chart your course by developing the financial habits and skill set needed to achieve your dreams and establish financial stability. Here are ten things you can do to support your journey to financial capability.
1. Start with your goals. What do you want for yourself and your loved ones now and in the future? A clear destination will guide you along the way and make it easier to stick to your plan.
2. Track your spending. Keep track of your spending for a few months. This can be eye opening and will help you understand where your money is going and if it is in line with your goals.
3. Automate your savings. If you set up automatic deposits to a savings account every paycheck, saving becomes effortless. Setting up a separate account for each goal can also help you stay on track.
4. Understand compound interest. If you understand the power of it, you will have incentive to save early and often. With compound interest, your money earns money and you will enjoy watching it grow! Be careful if you are carrying credit card debt, as compound interest can also work against you. Be the one earning it, not paying it.
5. Calculate your net worth. Know what you own and what you owe. Calculating net worth at least once a year allows you to track your financial progress. This will help keep you focused on building wealth and minimizing debt over your earning years.
6. Know your income tax situation. Understanding your marginal tax rate and tax brackets can help you make informed decisions around benefits and financial products with tax saving incentives.
7. Borrow carefully and strategically. Understand how borrowing money will influence your path to achieving your short and long-term goals. Be clear on the cost of any loans you take. Know that carrying a balance over on a credit card is usually an extremely expensive way to borrow money.
8. Keep an eye on your credit score and report. Know how and why it is important to have a good credit score and how it will affect your ability to access financial products. Reviewing your report can alert you to some types of identity theft. Know how to maintain a good score, or if needed, start on a credit improvement plan.
9. Bank where you and your community matter. Be an informed consumer of financial products and services. Take the time to compare interest rates, fees, and the service you receive. Is your financial institution a good community partner and do they support efforts that make where you live a better place?
10. Be a lifelong learner about personal finance. Follow, like, read, and listen to personal finance content. Attend educational events at your workplace regarding benefits and retirement savings programs if available. Find reliable and knowledgeable resources when needed for the financial milestones along your journey.
Staying the course on your financial journey will require patience, effort, and focus. Detours, setbacks, and the need to occasionally recalculate your route are to be expected along the way. Keep your destination in mind as you focus on the habits and skills needed to reach your goals and accomplish your dreams!