Financial Wellness - November 2023

6 Steps Toward Financial Wellness

Create a Budget

You should always know where your money is going. Creating a budget will help you live within (or below) your means and set realistic financial goals for your future. You should factor in necessary expenses, leisure spending and savings. Take a peek at the Take-Action resources to pick a budget that works for you!

Build an Emergency Fund

The second step of your financial wellness journey should be to start depositing money into an emergency fund. This account should always have three to six months’ worth of your household’s income that is reserved only for emergencies. You and your household should also define what constitutes an emergency for you and your household ahead of time so you can properly prepare. Examples of an emergency could be job loss, car accident, or medical incidents.

Protect Your Assets

While the emergency fund provides you with some immediate protection, insurance provides more security in other situations. Auto, home and health insurance can offset large, sudden, and unexpected expenses and losses.

Reduce or Eliminate Debt

Sit down and examine how much debt you have, and how much of your money is lost to interest. The more debt you have, the less you can put into investments to grow your wealth. Pay off debt to improve your credit score so you can comfortably borrow money for large purchases like a house or car. Look at our Take-Action resources to see what kind of debt reduction plan might work for you.

Save and Invest

Putting aside money for savings from each paycheck can add up. Consider different short-term savings options such as traditional savings accounts, money market funds and certificates of deposit. If your company has a 401(k) or other retirement savings plan, contribute to it. If your employer matches a portion of your contributions, it’s free money toward your future.

Plan for Retirement or Other Long-Term Goals

The sooner you start saving toward retirement, the more money you’ll have when you get there. Familiarize yourself with other retirement savings options — such as IRAs and annuities. Understand how different types of retirement resources — Social Security, retirement savings, annuities and others — can work together to provide you with income in retirement.