Sep 27 2022

Top 12 tips for financial wellness

From saving to budgeting, try one of these ideas to improve your financial wellness.

Financial wellness—also described as your relationship with money—is unique to every person. But one thing’s for sure: Gaining financial stability is sure to improve it. We’ve put together nearly a dozen ways to reduce financial stress and help make this possible.

The top 12 ways to boost your financial wellness

Support your financial wellbeing by doing this:

1. Beef up or create an emergency fund.

Your emergency fund is intended to save you from going under. Yet most households in the U.S. don’t feel good about how much they have saved. It’s generally recommended to set aside three to six months’ worth of living expenses for unexpected medical bills, repairs, and unemployment. You can automate to save a set amount each month until you reach this goal and/or save any extra income.

2. Get comfy using a budget.

Make it easy on yourself and use one of many handy budgeting apps versus a more cumbersome spreadsheet. Mint is free and allows you to create unlimited budget categories, whereas an app like Stash may cost as little as $1 a month and can ease you into beginner investing. Set savings goals—like saving up for a down payment on a house—and create a timeline to achieve them.

3. Explore multiple streams of income.

Maybe it’s starting a side hustle that can eventually turn into a full-time business. Or maybe it’s picking up odd jobs or freelancing on the weekend until you’re in a better financial position. Either way, having multiple income streams is deemed essential by many financial gurus when it comes to building prosperity. So, these hustles are worth investigating.

4. Invest time to get money back.

Sometimes, saving comes down to negotiation. For example: Because it can take time to dispute your property taxes, very few homeowners do it. But putting in the work to appeal this annual bill could help you save; the average property tax for a single-family home is estimated at $3,785. Other ideas include calling to request a discount on your internet service and renegotiating your insurance.

5. Keep learning.

Budgeting, finance, and investing podcasts are where it’s at if you want to learn how to achieve your monetary goals—and get inspired by others who are doing it. Afford Anything is a great pick for personal finance, The Ramsey Show is always a crowd favorite, and BiggerPockets is popular among aspiring real estate investors.

6. Look for ways to hedge inflation.

Right now, everyone’s thinking about inflation. Thankfully, there are a few reliable ways to hedge against it, and owning a home is one. If you’re already a homeowner, consider using other hedges to help buffer the effects of inflation—like investing in gold, stocks, TIPS (Treasury inflation-protected securities), and even a second rental property. As always, meet with your financial advisor before making any new investments.

7. Make sure you have enough insurance.

Like an emergency fund, having the appropriate amount of insurance coverage—health, homeowners, auto, life, etc.—can help to protect you financially if the unforeseen happens. Compare providers until you find a rate you’re comfortable with. Then make sure to read all terms carefully before signing up for a policy. You’ll want to know exactly what you’re covered for to avoid paying too much out of pocket.

8. Pay down high-interest debt.

With the Federal Reserve increasing the short-term cost of borrowing, now’s an ideal time to pay down debt, starting with debt at a high interest. The average homeowner has accumulated a record amount of equity. Some homeowners are cashing out on this home equity to pay off debt. If you own a home, it’s worth talking to your Loan Officer about this option.

Need more financial tools in your toolkit? An Academy Loan Officer is here to help.

9. Put money toward retirement.

Though it may seem hard to save for the future when times are tight, this is a big one. If your employer offers a 401(k), it’s important to invest in it (and make use of any matching contributions). If your job doesn’t offer those benefits: First ensure that your emergency savings are in good shape and then look into opening a ROTH IRA. Aim to invest 10 percent of your earnings if this falls within contribution limits.

10. Save fun money.

If you want your journey to financial wellness to be a marathon and not a sprint, you need to enjoy yourself along the way. On top of budgeting for monthly bills, debt payoff, and big-picture goals, make sure to set aside money for fun. Create an entertainment or vacation budget and give yourself something to look forward to.

11. Think about alternatives.

Depending on your financial situation, it might be time to get creative. Can you sell your car and start using public transport? Do you have a spare room you can rent, either short- or long-term? Might it be time to consolidate bills and consider multigenerational housing with family members? Each approach has its pros and cons—and may require some research. But most of the time, affordable alternatives are out there.

12. Trim the extras.

What can you do without? Your budgeting app (see number two) can provide a clearer picture of where funds are going to waste. It can be helpful to cancel subscriptions, memberships, and streaming services you’re no longer using. Downgrade your car, eat in instead of out, and buy generic when you have the chance.

Bonus tip: Stay friendly with your financial professionals

Wondering when you can afford to buy your first house? Need credit-strengthening strategies to help you qualify for a better mortgage rate? Looking to fine-tune your existing mortgage so you can build your prosperity? Keeping in touch with a mortgage expert can help you stay in the know so you make your smartest decision. Connect with a local Academy Loan Officer for guidance.

This is for informational and educational purposes only and not intended as an advertisement as defined by Regulation Z. Please consult a trusted professional as personal circumstances may vary. No specific results are guaranteed. MAC823-1482406.