Here, we will explain what this financial health actually is and how to achieve it. Check out!
What is financial health?
Simply put, this type of health is when a person lives with their financial organization up to date. We can also speak of someone who is financially independent, that is, who is not held hostage by negative habits related to money.
On the contrary, this subject includes healthy practices of dealing with finances in their routines, which allows them to achieve all their goals. And financial health goes beyond owning money or possessions. It is much more linked to financial education, especially in its behavioral sphere.
How can I keep my financial health up to date?
If you’ve been reading this far and managed to feel the pleasure of imagining yourself living this reality, it’s time to learn in practice how to create and maintain financial health. We have prepared some specific tips, which go beyond the classic financial goals. How about taking a look?
1. Track your income and expenses
No more relying on your memory alone. The best way to organize yourself to achieve a healthy financial life is through timely control of income and expenses. Basically, account for everything that goes in and out of your pocket. You can use pen and paper, but financial management apps are great in this regard.
When we write down in detail all the variables of our financial situation, we are able to visualize reality in a much clearer and more realistic way. The numbers altogether, added and subtracted, may even be scary at first, but they are the perfect X-rays of your consumption habits.
2. Find out more about finances
In order to be motivated in this mission, it is worth really understanding how things work. With this kind of knowledge, it is possible to have the autonomy necessary to deal with money without it dominating your life.
You are already doing it here, reading this content on our blog! The tip is: keep going, research, study and learn more and more. This even helps to practice self-knowledge for your habits, cut unnecessary expenses, and use your income in a smarter way.
3. Plan your retirement
Those who have financial health, also think about the physical and mental health of a life without future worries. But that doesn’t mean you shouldn’t put efforts into long-term plans — such as retirement.
Unfortunately, people only remember this factor when they are old enough. And this is the biggest mistake, after all, the time to plan is today. Take advantage of your time spent on financial education and study ways to invest in private pensions, for example, or in alternatives to have your money waiting for you in the future.
4. Have an emergency reserve and diversify your investments
Since you will be planning your retirement, it is also worth thinking about other forms of investment and medium and short-term goals. Here, it even enters your emergency reserve, to be used in really necessary moments. In fact, that was the biggest financial lesson during the pandemic.
With dedication not only to saving but to learning, you will see that it is totally possible to separate an amount for this emergency fund and another to diversify your investments. So your money is not 100% committed in one place.
5. Pay off your debts
All the tips we’ve given you so far are valuable, but they won’t work if you don’t sort out your financial life first. So, if you have outstanding debts, do your best to pay them all off. In this sense, it is necessary to have strategic intelligence not to fall into high-interest loans and only increase the snowball.
But, on the other hand, it may be interesting to take on a smaller debt to pay off the larger one. After all, she is your priority. Just calmly analyze the most attractive interest rates and rates on the market, putting everything at the tip of the pencil. Negotiate with creditors and financial institutions and find the best way out.
6. Look for extra sources of income
One way to make managing your monthly bills easier — and even paying off debts faster — is to increase your income. But if the long-awaited promotion is not enough, it is possible to make extra money with other activities.
Today the internet is a vast field in this sense. Without leaving your home, you can find additional sources of income with freelance work, online sales, and even affiliate marketing. It is also valid to share your knowledge with courses, classes, and other info products, which guarantee an interesting recurring income.
Thanks for reading this article by ExtNext, hope you will learn something about Financial Health.
