Our finances play a huge role in how we live our lives. While it can feel overwhelming to understand and track where all our money is going, it’s important for helping us plan and take care of our wellbeing for months, years, and even decades from now.
You don’t need a huge salary to practice financial wellness. There are steps many people can take to help pay down debt, save for retirement, and put aside money to spend on the things that bring us joy and fulfillment. Here are a few places to start if you’re interested in practicing financial wellness this year.
Understand what you spend your money on each year and reevaluate whether those things are necessary or match your interests and goals. For example, do you have subscriptions to streaming services, apps, or memberships that you’re not frequently using? Consider trimming those. Want to start saving to travel during the year? Set aside a percentage of each paycheck for that. A common practice for budgeting is the 50-30-20 rule, which means you plan to spend 50 percent of your income on necessities like housing, gas, food, and utilities, 30 percent of your income on wants, and 20 percent of your income on savings.
Saving for retirement is important from the moment you start making a paycheck to help you take care of your future. It’s also a great way to cash-in on free money, as many companies have matching retirement plans which contribute sums based on the percentage you’re investing. Financial experts say that we should all be putting 10-15 percent of our pre-tax income toward retirement, NerdWallet reports.
Reducing debts, from student loans to credit cards to car payments, should also be a consistent part of distributing your paychecks. Going back to the 50-30-20 rule, you can divy up the 20 percent portion between paying off your debts and putting aside savings for things like retirement and an emergency fund. This way, you are both reducing the amount of interest accruing over the long term through your debts while also building savings in the case of an emergency. It’s a good rule of thumb to have 3-6 months of living expenses in the bank that you can easily access if you lose your job.
Having insurance plans are important for saving you money in case disaster strikes. Whether that’s pet insurance to cover medical bills, home insurance that will protect you from incidents like flooding or fire, or health insurance to help you maintain your wellbeing and longevity, look out for insurance plans that fit your needs.
Questions about insurance plans that fit your lifestyle? Contact a Sea Mountain Personal Insurance Specialist today!
