It’s time for a financial wellness check: Part 1
Start the year by checking the health of your finances.
It’s time for your annual wellness check. By that I mean your financial wellness check. A periodic check of personal finances is mandatory to remain in control. Are you on target with your savings goals? Are spending and debt at a reasonable level? A yearly financial review will help with your money management goals. In this first part of three articles, the financial component of saving is discussed.
Savings is an integral part of financial wellness. Having adequate savings will contribute to your peace of mind during emergency situations. You should have enough money saved to cover at least three months of expenses.
In addition, decide what goals you want to achieve. Categorize the goals into short-term, mid-term, and long-term. Short-term goals are defined as those goals that can be attained in less than six months. Mid-term goals take between six and 12 months to reach. Long-term-goals will take a year or more. Write each goal, allocate an amount to save, and assign a deadline to be reach the goal.
One important financial goal, that should not be postponed, is retirement. A retirement calculator can assist you in determining the amount needed to save for retirement.
To make saving easier, consider having funds automatically deducted from your paycheck or checking account and deposited into other accounts. You can predetermine the amount that will be deducted. Automatic deposits are useful savings tools but be sure to educate yourself about the terms of opening and maintaining saving accounts. Research any fees, penalties and guidelines associated with the accounts.
The second article of this three part series will cover the importance of tracking and controlling your spending.
Michigan State University educators invite you assess your financial health and visit Michigan State University Extension. In addition, Michigan State University offers money management and homeownership classes. For more information about classes offered in your area visit MI Money Health.