9 Ways To Achieve Financial Wellness

January is Financial Wellness Month. Financial Wellness is the overall financial status or state of an individual that involves a combination of the mental and physical aspects of money. Financial wellness is based on a strong financial mindset that determine an individual’s thoughts, actions, behaviors and attitudes regarding money.

Financial wellness involves understanding your financial situation and having the desire, skills and knowledge to adequately handle risks and changes to your financial situation. Financial wellness involves knowing how much money you earn, spend and owe at any given time and developing a plan for the future. Financial wellness can also be called financial security, financial freedom, financial independence or financial stability.

Financial wellness ensures that you don’t have to stress or worry about your finances and involves developing a financial plan on your own or by hiring a financial expert that will help you to achieve your financial goals and consistently live within your means. Financial wellness means having a consistent cash flow to pay for all of your needs and wants and being able to achieve the dreams and lifestyle your desire in a balance manner.

According to the Federal Reserve, 43% of Americans live above their means. Many Americans live paycheck to paycheck and are living in either low- or middle-income households – some just one paycheck away from being homeless. If they lose their jobs, they have no backup plan, no savings and no safety net to help them through a financial crisis.

Many school systems do not teach financial literacy. These statistics show the importance of financial wellness in America. To successfully navigate through life Americans must make the right financial decisions that will affect their future and their future generations. Here are 9 effective ways to achieve financial wellness.

CHANGE Mindset

Change your mindset. You have to change your thinking regarding finances. It takes 23 days to start a habit and make a new action part of your daily life. If you want a different financial outcome, you have to make a permanent change regarding your finances.

Avoid YOLO and FOMO

Think about your future today, every action you take today affects your financial future so plan ahead and develop contingency plans.

Organize

Get your finances organized – file, categorize, prioritize, and automate your finances.

Use tools

Use tools to help you such as online banking, alerts, software, webinars, teleseminars, TV shows, seminars, classes, or radio shows.

Use apps

Use apps such as Mint or Mint Bill, Build Guard, Yodlee, You Need a Budget, Expensify or Toshl to manage your finances.

DIY

Read self-help books on personal finance that discuss budgeting, investing, retirement, saving, and taxes. Read articles on websites such as CNN Money, Yahoo Finance, Bankrate.com, MSN Money and morningstar.com. The more you know the more you grow. Money can generate wealth or generate debt, you make the choice.

CONDUCT Estate planning

Hire an estate lawyer to setup a will, trust and advanced medical directive.

PREPARE Taxes

Hire a CPA to prepare your taxes (personal and business) to minimize tax liabilities.

CREATE A Financial plan

Hire a financial planner, financial advisor or financial coach to help you map out a financial roadmap and plan for retirement.

7 Steps to Financial Freedom

  

Most Americans are too materialist and focus all the energy and money on buying things. You can have financial freedom no matter what your current financial situation. Elinor Sauerwein was an elderly poor woman who saved her money and donated over $1,000,000 to charity. Oseola McCarty was an elderly poor woman who saved her money and donated over $150,000 to a local college. Both women lived a simple life but always had everything they needed.

Financial freedom requires changing your mindset, changing the way you think about money. If you believe you will always be poor, you will. If you believe you will always be in debt, you will. Your words are powerful and your actions are even more powerful. Your thoughts, attitudes, beliefs and actions always have to align with your financial goals. 

Not everyone may become wealthy but you can have financial freedom. Having financial freedom is being in control of your finances, spending money responsibly, buying needs more often than buying wants, and setting financial goals for your future.  Here are seven steps to financial freedom.

1.      Budget. Track your spending daily or weekly using pen and paper, a Word or Excel document, an app or online banking. The key to financial freedom is creating a monthly spending plan and spending less than you earn.

2.      Less. Less is more. Spend less than you earn. Buy more needs versus wants. If you have less than 5% of your monthly income left over each month you need to reduce spending by 30% - 50%. Use the money left over to contribute to a savings account or pay down debt. Avoid buying liabilities or things that have no value such as designer clothes, shoes, cars, games, electronics and accessories. Buy items that appreciate over time and have value such as homes, stocks, bonds, diamonds, gold or art.

3.      Become a homeowner. Becoming a homeowner provides a tax write-off, increases your financial worth and provides you with an asset that will appreciate over time. Visit www.hud.gov for information on buying a home.

4.      Buy insurance. Buy health, life and disability insurance. Many people get in debt from medical costs because they do not have health insurance.  Disability insurance will help you if you become seriously ill and have to be off work for an extended period of time. This will also help you to recover because you will not have to worry about how your bills will be paid during your time off from work. Life insurance helps cover burial costs after a loved one has passed.

5. Pay off your debts. Paying off debt is a key factor in obtaining financial freedom.  Pay off credit card debt first starting with the smallest bill. Then begin paying off loans and any other debt.
6. Plan for your retirement. Many Americans have to work past retirement age because they have no savings or retirement.  Contact a brokerage company and open a no load mutual fund.  Visit www.morningstar.com for information on planning for retirement. 
7. Start a business. Find out what your passion is, what you love to do more than anything else. Do your research before starting your business. You can start your business in your home; there are many tax write-offs for home based businesses. Contact the Small Business Administration at www.sba.gov for information on starting a business.

By following these steps, developing practical spending habits and investing your money wisely you will be well on your way to financial freedom.

11 Steps to Financial Wellness

                                        

January is Financial Wellness Month. Financial Wellness is the overall financial status or state of an individual that involves a combination of the mental and physical aspects of money. Financial wellness is based on a strong financial mindset that determine an individual’s thoughts, actions, behaviors and attitudes regarding money. Financial wellness involves understanding your financial situation and having the desire, skills and knowledge to adequately handle risks and changes to your financial situation. Financial wellness involves knowing how much money you earn, spend and owe at any given time and developing a plan for the future. Financial wellness can also be called financial security, financial freedom, financial independence or financial stability.

Financial wellness ensures that you don’t have to stress or worry about your finances and involves developing a financial plan on your own or by hiring a financial expert that will help you to achieve your financial goals and consistently live within your means. Financial wellness means having a consistent cash flow to pay for all of your needs and wants and being able to achieve the dreams and lifestyle your desire in a balance manner.

According to the Federal Reserve, 43% of Americans live above their means. Many Americans live paycheck to paycheck and are living in either low-income or middle-income households – some just one paycheck away from being homeless. If they lose their jobs, they have no backup plan, no savings and no safety net to help them through a financial crisis. Many school systems do not teach financial literacy. This statistics show the importance of financial wellness in America. To successfully navigate through life Americans must make the right financial decisions that will affect their future and their future generations.

Here are some questions that will help you determine if you possess financial wellness. If you answer "no" to 5 or more questions, you need to gain knowledge about financial literacy and change your mindset – your thoughts about money.

1. Do you have a bank account?
2. Do you frequently overdraw your bank account?
3. Do you have an emergency fund? Do you have at least 9-12 months of savings in an emergency fund?
4. Do you cash your checks at a check cashing store or liquor store?
5. Do you pay bills late?
6. Do you have a retirement account?
7. Do you know what your current credit score is?
8. Do you reconcile your purchases and financial transactions against your bank and financial statements?
9. Do you have a budget?
10. Do you know how much debt you owe?
11. Do you know your net worth?
12. Do you owe taxes or have you owed taxes in the past?
13. Do you have adequate insurance?
14. Do you have an estate plan?

Here are 11 effective ways to achieve financial wellness.

1. Organize. Get your finances organized – file, categorize, prioritize, automate your finances.
2. Hire. Hire at least one financial professional – CPA, financial planner or financial coach.
3. Use tools. Use tools to help you such as online banking, alerts, software, webinars, teleseminars, TV shows, seminars, classes, boot camps or radio shows.
4. Revisit. Continually review information that you find helpful to refresh your memory and help you stay on track.
5. Mindset. Change your mindset. You have to change your thinking regarding finances. It takes 23 days to start a habit and make a new action part of your daily life. If you want a different financial outcome, you have to make a permanent change regarding your finances.
6. Estate planning. Hire an estate lawyer to setup a will, trust and advanced medical directive.
7. Taxes. Hire a CPA to prepare your taxes (personal and business) to minimize tax liabilities.
8. Financial planning. Hire a financial planner, advisor or financial coach to help you map out a financial roadmap and plan for retirement.
9. Avoid YOLO. Think about your future today, every action you take today affects your financial future so plan ahead and develop contingency plans.
10. Use apps. Use apps such as Mint or Mint Bill, Build Guard, Yodlee, You Need a Budget, Expensify or Toshl to manage your finances.
11. DIY. Read self-help books on personal finance that discuss budgeting, investing, retirement, saving, and taxes. Read articles on websites such as CNN Money, Yahoo Finance, Bankrate.com, MSN Money and morningstar.com. The more you know the more you grow. Money can generate wealth or generate debt, you make the choice.