Money Matters: 5 Steps to Better Financial Health

Cary, NC — Nick Putnam, a Financial Advisor for First Command Financial Services, Inc., shares with us five simple steps toward better financial health.

Five Steps to Better Financial Health

Have you checked on your financial health lately? If you’re like many Americans, you’ve discovered that your finances could be in better shape.

With just five simple steps, you can be on your way to a healthier financial life.

Put Your Goals on Paper

Consider your plans for the near and long-term. Whether you’d like to go back to school, start a business, purchase a home or simply boost your emergency savings, it’s worth it to write your goals down. Having a record of your goals can make them more “real” in your mind.

Track Your Spending

Keeping tabs on every dollar you make and spend is the first step toward establishing better financial health. Whether you use free online software, choose to purchase a program or even use a notebook, tracking your spending is the only way to know exactly where your money goes.

Cut Your Credit Card Debt

Credit card debt may seem like a burden that will never completely go away, but with commitment and a little know-how, you can tackle those balances.

Contact your credit card company, and ask about a reduced interest rate and about transferring other high-interest rate balances to a lower-interest card. Then, make more than the minimum payment each month – as much as you can – and make sure your payments arrive on time. Your credit card company could charge high fees for being even a day or two late.

Save, Save, Save

If you don’t participate in an employer-sponsored retirement plan or a plan for the self-employed, now may be the time to start.

Contribute at least enough to earn an employer match, if one is offered. Take a look at your emergency savings – this is the cash you keep on hand for unexpected expenses, whether that is a car repair, plumbing emergency or something similar. Set aside a small percentage of each paycheck to boost this account if you’ve had to dip into it in the past.

Trim Your Miscellaneous Expenses

In addition to mortgage or rent, insurance, groceries and utilities, you’ve probably got expenses that don’t really fit nicely into one group. These miscellaneous expenses – eating out, gifts, clothes and entertainment – can really add up. Make a commitment to cut 10, 20 or even 30 percent from your miscellaneous category and you’ll be on your way toward big savings.

Simple Adjustments Help

Just as we count on physicians to analyze our physical health and provide treatment when needed, we must also face our finances and take steps to improve our fiscal health. Keep in mind that the simplest adjustments can make a big impact on improving your financial life.

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Story contributed by Nick Putnam, a Financial Advisor for First Command Financial Services, Inc. Lead photo by 401(K) 2012.