Much like physical health, a person’s financial health is important and deserves attention. Conducting a financial wellness check can help you determine what adjustments you need to make in your life.
In many cases, our finances can make or break us, so having an awareness of where we stand financially is critical. Establishing clear financial goals is the first and most important thing to do when doing a financial checkup. These goals will help you decide which road to take in your financial future.
Paying down or reducing your debt can be a great way to start. If you have a high-interest rate credit card with a high balance, then consider starting with that and going from there.
Take a look at your bank statements from the previous year. Check your spending habits. Have you been spending more on non-essential items than essential expenses? Go over the items that are most important and considered a need and not a want. You may want to eliminate some of those extra indulgences until you’ve tackled your outstanding debt.
David Cunningham of Landmark Forum suggests using the “3 Cs Recipe” to achieve long-term financial health or to meet other financial goals. These include: clarity, commitment and calendar.
Clarity involves writing down everything you owe, then separating the facts from the stories you’ve made up like, “I’m bad with money.”
Creating a “commitment” is designed to inspire you to set feasible goals. Is it paying off a portion of your debt by the end of the year? Is it paying off all your credit card debt? Maybe you want to start saving money.
Lastly, the Landmark Forum leader describes “calendar”as the most important step of the 3 Cs. He says only one thing will alter your financial situation: action.
To set forth the final step in gaining financial freedom, turn to your calendar to schedule the specific actions you will do, then schedule the specific dates they’ll be done by.
Additionally, establishing a savings account will help you prepare for any unexpected expenses and could aid in reaching your financial goals (a new car, saving for a house, school, etc.). Refer to your budget to help you devise a practical plan and use it to reach your savings goals.
Identify what you want to achieve in the short term and long term, and write those goals down. Those who write their goals down have a much higher success in achieving them.
By following these simple steps, you can become free of debt in the near future and on your way to financial freedom.