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Financial Wellness - What It Means and How to Get There

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What does financial wellness mean to you? It can mean many things to different people, but being financially sound is a state of being. Do you pay your bills on time? Are you able to weather unexpected financial emergencies should they arise? Do you have a plan for retirement or are you putting money away for your kid’s college fund? Financial wellness means having a healthy financial life and not living beyond your means. Below are a few ways to help you begin practicing financial wellness for the new year.

•  Set and commit to a budget – Being able to track your spending will allow you to see where you can save and where your money is going.

•  Have an emergency fund - Emergency funds vary from different people depending on their monthly costs, income, etc., but the rule of thumb is to have at least three to six months’ worth of expenses saved up.

•  Save money consistently – Get in the habit of paying yourself first. Being able to contribute to your employer’s 401k plan is a great way to start saving. You can also set up an automatic withdrawal when you get paid so a certain amount goes directly into your savings without even having to think about it.

•  Save now for education with a 529 Plan – It’s never too early to start saving for a college savings plan for your children and it will grow tax-free.

•  Pay off debts in small bites – If you have a lot of debt, pay off the smaller expenses first. Think about consolidating debt with a lower interest rate.

•  Track the due date of your bills – Making sure you pay your bills on time will allow you to plan for future months and ensure you never miss a payment and incur a late fee.

•  Set up alerts in your checking account – By setting up alerts, it will help you to avoid late fees when your balance is getting low.

•  Don't over apply for credit and loans – Only apply for credit or loans that you need.  Having too many could affect your score in a negative way.

You can find out your financial well-being by visiting the Consumer Financial Protection Bureau here. By answering a few questions you can see where you rank and take steps to improve it.

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Categories: CapFed® News , Just For Fun , Strategies for Saving
Tags: About CapFed , Kansas City , Lawrence , Topeka , Wichita

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