How to Celebrate Financial Wellness Month

Maintaining your financial wellness is crucial, not just for your future, but for your present peace of mind. Read on to learn how to tend to your financial health – it’s never too late (or too early) to start!

1. Take Stock of Your Emergency Fund

Think of an emergency fund like health insurance: prepare as if you’ll need it one day, and hopefully, you never will! Your emergency fund should be kept separate from your savings and retirement accounts, as it serves a different purpose. Once you’ve established an emergency fund, take stock of it every three months or so. Assess your balance and adjust goals, check on better rates, and replenish your savings account if necessary. Do this on a routine basis to ensure you’re covered in the event of an unexpected financial burden.

2. Check Your Credit

Understanding what credit is and why it’s so important can feel daunting; however, it’s a simpler concept than you might think. Your credit is simply your financial history––specifically, your past and present debts and the payment histories associated with them. It demonstrates your level of trustworthiness in borrowing money (i.e., your likelihood of repaying borrowed funds on time and/or in full) and is represented and summarized with a three-digit number: your credit score. That score is found on your credit report, which is simply a detailed accounting of your full debt/payoff history.

In order to maintain peak financial wellness, it’s crucial that you check your credit regularly. The three primary U.S. credit bureaus (also known as credit reporting agencies, or consumer reporting agencies) are Experian, Equifax, and Transunion. As a U.S. citizen, you’re entitled to a free credit report from each of these entities once per year. This means you have the capacity to check your credit for free every four (4) months! Doing this will allow you to track your financial standing, identify potential identity theft, and find opportunities to improve your score.

3. Review Retirement Plans

It can be easy to allow your retirement plans to take a back seat, especially if retirement is still many years away for you; however, it’s important that you review and evaluate them regularly. This allows you to ensure that you’re on track with your retirement goals, along with determining whether there’s an opportunity to increase or reroute your contributions.

4. Tackle Credit Card Debt

You might be surprised at just how much a difference it can make to have a strategy in place for addressing your credit card debt. There are two popular strategies known as the avalanche method and the snowball method. The avalanche method involves first addressing, or paying off, the debt that has the highest interest rate (i.e., the highest fee you’re paying for borrowing the money). With this method, you don’t ignore your lower interest debts; rather, you make monthly payments on all of your debts––with the largest percentage or dollar amount going towards the debt that has the highest interest rate. The snowball method involves prioritizing your smallest balance first. For example, if you had four credit card payments to make in a given month, you would put the largest percentage payment onto the credit card that has the smallest balance. Determine which method works best for your financial situation and begin tackling credit card debt with intention.

While January is the only National Financial Wellness Month of the year, you should strive to prioritize your financial wellness year-round by implementing the above practices into your routine. Grand Savings Bank is here to help you navigate every step of that journey. Connect with us today!