Checking Up On Your Financial Health
Date: February 3, 2023
The new year is in full swing! Now that it is February, it might be a good time to check in on those New Year’s resolutions that you made. When it comes to creating goals for the new year, financial resolutions are among the most popular made in the United States. In fact, 30% of Americans say that their goal in 2023 is to improve their finances.[1] However, it is said that 80% of these resolutions fail[2]. So how can you best prepare yourself to be in the successful few? You can start off with periodically checking in on your financial health.
Checking your credit report is a great place to start. There are different ways to check your credit but simply knowing your credit score is just the beginning. In order to make sure that your credit history is accurate you should check your report annually. Your credit report can show you what a lender would see, in terms of your history, and allow you to double check your own transactions. Raising your credit score might be another of your goals in 2023. You can raise your score in myriad ways, the most common being paying your expenses and bills in full in a timely manner. Don’t be discouraged if you are not where you want to be - there are always ways to improve!
Next, examine and revamp your budget. If you have a budgeting system, the beginning of a year is a great time to look at your financial priorities. If you do not keep a budget, it is time to start. Although, it is important to remember that the work is not done when the budget is created. Budgets may evolve over time just as our goals and priorities do. Currently, only 70% of people who make a budget, even check their spending against that budget.[1] That means budgeters could be missing out on potential tweaks that can help them reach their goals. So, this month you can pull your credit card and bank statements to find those recurring expenses or one-off purchases that might not be necessary. Part of the budgeting process is checking in on those major and non-negotiable expenses like your health, life and car insurance, loan payoffs and even retirement. While the actual payments must be part of your budget, you can take the time to look at your policies and ensure that your plans are providing you the competitive rates that you need while still meeting your coverage goals.
Last, you can create a long term plan that will propel you towards your financial goals. Everyone’s end goal is different. Whether your hope is to put money aside for retirement, strengthen your emergency savings, save for a large purchase, or simply pay off your bills, it is crucial that you have the pathway to these goals laid out in a tangible way.
After you have completed your check in, the journey is not over! Financial health requires time, dedication and maintenance. It is a necessity to check in on your progress over the course of the year. As you continue your journey to financial well-being, Affinity is here to help. You can learn more about staying up to date with your financial health by listening to our latest episode of our podcast “Wellbeing and Your Wallet.” 4
This information is for informational purposes only and is intended to provide general guidance and does not constitute legal, tax, or financial advice. Each person’s circumstances are different and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and/or legal counsel to discuss your specific needs before making any financial or other commitments regarding the matters related to your condition.