6 Milestones on Your Path to Financial Wellbeing

6 Milestones on Your Path to Financial Wellbeing

Have you been wanting to get your finances in order but don’t know how to start? Or how to measure your progress? Everybody is at a different stage in their financial lives, and few people have the same goals. But there are still key milestones you can set to get you started on the path to wellbeing.

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Financial milestones can take many forms and should be specific to you and the many moving parts of your life. In their simplest forms, they are tiered goals that you aim to achieve. From a high level, industry experts tend to have a hierarchal list that goes something like this:

  1. I have at least $1,000 in a liquid savings account, earmarked solely for emergencies.
  2. I have a detailed budget in place that actually works for me.
  3. I have 3 months-worth of living expenses saved for emergencies.
  4. I have 6 months-worth of living expenses saved for emergencies.
  5. I am debt free.
  6. I am building long-term wealth.

How to achieve each of these milestones and what your ultimate endgame is – paying off student loan debt, buying a home, etc. – is up to you. But before you move on to the next stage, here are some best practices to ensure you’re well-hydrated throughout your journey:

• Take advantage of the Affinity SmartStart Savings account. While most savings accounts don’t start paying interest before reaching a certain threshold, this account does the inverse: it pays you 2.00% annual percentage yield on balances under $2,500, and a lower rate on your savings after that until you reach $5,000. The SmartStart Savings account is great if you’re still working toward that initial $1,000 in emergency savings, as you get to start earning money on interest right away. There’s also no minimum opening deposit.

• What’s the best way to eat an elephant? One bite at a time. If your financial resolution is to save or payoff a significant sum of money, make sure you take a moment to periodically recognize your progress. Break down your larger year-long goal into quarterly milestones. This will ensure you’re on the right track and staying focused on the end goal.

• Make a list of actions that would provide an immediate real-world benefit, while also contributing to your financial resolution. For example, if my resolution was to eliminate debt, my action would be “Instead of ordering delivery, I will cook a meal and use the saved money to make an extra loan payment.” Doing so not only contributes to my resolution, but it also gives me a good reason to spend more time in the kitchen, an activity that I value.

The road to financial wellness is usually a marathon, not a sprint. Because of this, whichever endgame serves as the object of your journey, the most important part is making sure you’re motivated enough to stay on track.

For more detailed tips on saving money and building a budget, see Affinity’s Financial Wellness and Education resources.

                                                  

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 are made.