Northeast Wisconsin
  • Northeast Wisconsin
  • October 2017
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Four simple ways to boost financial wellness

How healthy are your finances? The Center for Financial Services Innovation recently reported that 56 percent of American workers are financially unhealthy. A survey by the American Psychological Association (APA) identified some causes of financial stress including dealing with unexpected expenses, paying for essentials and saving for retirement.

Stress can leave people feeling irritable, anxious and overwhelmed. In the 2015 APA survey, 51 percent of the women surveyed said they had lain awake at night due to stress.

1. Rainy day fund

One proven way to relieve financial stress is to have money saved for the proverbial “rainy day.” Rainy days can come in many ways. A twisted ankle or nagging illness can trigger high co-pays and deductibles. Your car may start hissing like an alley cat instead of purring contentedly. Or your dentist may say, “It’s time for you to wear a crown” — only it’s not for the top of your head!

Experts recommend having three to six months of living expenses saved for emergencies. It takes time to save such a large amount. For a pain-free way to save automatically, ask your bank or credit union to set up an automatic transfer from your checking account to a separate savings account.

For example, on the 15th of each month, Lisa has $100 automatically transferred from her checking account to her emergency savings account. She is treating this just like she’s paying an important bill, and it is important, because it helps her be prepared and have peace of mind.

2. Plan to play

Financial wellness includes planning to spend money on playing and having fun. Surprised? We’re all busy. We need time to play and re-charge. For your long-term mental health, plan to spend an amount that’s appropriate for you on entertainment and vacations.

3. Have a spending plan

How much can you afford to spend on vacations and entertainment? A simple budget or “spending plan” earmarks money for necessities like housing and transportation, helps you save for your dreams and identifies what you can comfortably spend on entertainment.

Investing some time creating a spending plan offers huge rewards for your family’s future and your peace of mind. A financial coach can help you review your finances and develop a balanced spending plan that fits your life.

4. Financial check up

You know it’s wise to have an annual medical checkup. It’s also smart to have an annual financial checkup.

Summarizing your net worth is a key part of a financial checkup. Write down your assets, including your checking account balance, savings, 401(k) and IRA balances and fair market value of assets like a home and cars. Also list your debts, including car loans, mortgages, credit cards and student loans.

When you subtract your debts from your assets that is your net worth. The goal is to build up assets and pay down debt. If your debts are growing and your assets are dragging, don’t ignore that financial warning sign. (For a blank net worth worksheet and an example of a completed worksheet, visit https://www.fisc-cccs.org/resources/.)

Build financial security and peace of mind

A financial counselor or coach can help you discover ways to fine tune your finances, build financial security and increase your peace of mind. A few simple steps can often make a dramatic difference. 

Alan Prahl

Alan Prahl is the Education Leader with FISC, the Financial Information & Service Center. He has an undergraduate degree from the University of Wisconsin in Madison and law degree from Hamline University. A nonprofit program of Goodwill NCW, FISC provides financial counseling and coaching, including a no-cost, no obligation 30-minute consultation with the “counselor on call.” To learn more, call 920-886-1000 or visit www.fisc-cccs.org.

Website: www.fisc-cccs.org
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