6 Steps to Your Financial Wellness Plan

Just imagine a life where financial stress no longer weighs you down, where you can confidently make money decisions, and have the confidence to seize opportunities that get you closer to your dreams. This is the power of financial literacy. In this article, we will give you the understanding and skills needed to manage your finances effectively, allowing you to take control of your present and shape your financial future. Let’s begin:

Step 1: Get to Know Your Finances
Do you know your income? Do you know your total household expenses? Review all your expenses and determine where you can make cuts. Write down all your bills, from necessary ones to indulgent ones: do you need four to five streaming services? Did you know you even had that many?

Step 2: Figure Out Your Financial Goals
Set short-term, midterm and long-term goals. How realistic are these goals? Are they SMART goals (i.e., Specific, Measurable, Achievable, Relevant and Timed)?

Step 3: Set Up Your Plan/Budget
Knowing what your income is and how you are spending it will help you set up your financial road map to reach your goals. Find ways to save money: Use coupons or shopping apps that help you earn money back, shop around for lower interest rates for loans and higher interest rates on checking/savings accounts, and negotiate insurance premiums.

Step 4: Start Saving Today
Did you include yourself in the budget? Make sure you pay yourself first; start with what you can afford, then adjust as you go. If you can transfer money to savings automatically, do it. Even small amounts that are out of sight, out of mind, can accumulate quite a bit in a short period of time.

Step 5: Review the Plan
After three months, go back and review your budget. Is there something that is taking you off course? Can you adjust for it? Is everyone in the household sticking to the plan and goals?

Step 6: Keep Learning!
Once you’ve become comfortable with managing your money and financial behavior, move on to learning more about your financial well-being. Do you know what your credit report looks like? Are you thinking about investing or saving for retirement? Find resources to keep you moving ahead on your financial journey. Attend a homebuyer’s seminar or a presentation about retirement options.

Becoming financially literate does not need to be a full-time job, but it should give you the tools to handle everyday expenses and unsuspecting costs. Focusing some time on your financial wellness will help to ease financial stress, so take time to enjoy the journey and don’t rush through the process.

Remember, becoming financially literate does not equate to immediate financial wellness. It does take time, but by managing what you can control, you can save yourself some stress. Find free resources, like the FDIC Financial Education Center.