Financial wellness is an important skill to learn. Even if you are not the type of person that pays attention to numbers or finance it is still very important that you know your money basics. You don’t want your lack of knowledge on the subject of money preventing you from achieving your goals.
There are a lot of different things to think about when it comes to personal finance. From building an emergency fund, to saving for retirement, to understanding credit scores and interest rates – it can be a lot to take in. But don’t worry, we’re here to help!
If you’re a business owner, consider having financial wellness benefits for employees. This can help them in their financial wellness during times of need. It is an important part of the business world to have good finance management so you can become successful in your field.
Below we will go over some of the most important things you need to know about personal finance. And don’t forget, if you ever have any questions you can always reach out to a financial advisor for help.
How to Build an Emergency Fund
An emergency fund is an important part of your financial wellness plan. This is money that you set aside specifically for unexpected expenses. This could be an emergency room visit, car repair, or even a big home repair. The amount of your emergency fund depends on you – if your expenses tend to be more frequent and higher than average then you should have a bigger fund.
It is important that this money is accessible when an emergency comes up so it’s best to keep this money in something like a savings account or money market account. You don’t want to have to sell investments or take out a loan in order to cover an unexpected expense.
How to Save for Retirement
One of the most important things you can do for your financial wellness is save for retirement. This may seem like a daunting task, but it is something that is well worth putting your energy into.
There are many ways to save for retirement. If you have a job, then it’s likely that your employer may offer you access to a 401k plan or some kind of IRA account. These are great options if they are available because they allow you to put money away pretax right now, and the investments grow tax free.
If you don’t have access to these plans or if your company doesn’t offer them, then setting up an individual retirement account (IRA) is important too. With this account, you will be able to put away money and claim a deduction at the end of the year for your contributions. The best part is that any money you make from investments in your IRA account grows and compounds without getting taxed. This means that the money in your IRA account will grow faster than in a taxable account, and if you keep it long enough then retirement could be closer than you think.
How to Improve Your Credit Score
Every month when we get our credit score report we are reminded of how important it is to have a good credit score. A high credit score means you’re a low-risk borrower, which can lead to lower interest rates on things like car loans and mortgages.
If you’re looking to improve your credit score, then there are a few things you can do. One of the simplest things you can do is to pay your bills on time every month. Also, try to pay off more of the balance than what’s due each month so you don’t accrue interest.
Another thing you should always keep in mind is that it’s okay to apply for credit from time to time, but never open up too many accounts at once. Too many inquiries will hurt your credit score, so be mindful of this when you’re looking to borrow money.
