When I go to the doctor for a physical, I get blood drawn, my blood pressure taken and my weight checked. These are all factors my doctor takes into account before giving me advice about my health. Unfortunately, I don't have a financial advisor to tell me if I'm financially healthy. However, according to a business and money article from Time, there are ways to improve your financial health. Paying off credit card debt, putting money into an emergency account and tracking spending are just some of the indicators of a "healthy" individual. While I still need to shape up, I'm slowly improving my financial health.
Credit Card Debt
My family has zero credit card debt. This hasn't always been the case. However, I have stopped using credit cards and have decided to close all of my major accounts. After all, once you start accumulating credit card debt, it can quickly become a financial problem.
Tracking our Spending
After putting more money in our savings account, we started tracking our spending to make sure we were staying within budget. We set aside a certain amount of money for food. When we went grocery shopping, we subtracted the money away from our monthly food budget. We also wrote down how much we spent on extras like clothing, entertainment and dining. It made us feel more in control of our spending. According to credit.com, research shows that tracking spending really can make you healthier. During a four-month experiment participants wrote down every single purchase. Along with improving their financial health, the participants "also smoked and drank less, ate less junk food and even found they were more productive at school and at home."
A few months ago, I drained our emergency account. It seemed like we kept have one problem after another so it was hard to rebuild it. However, extra income sources and being frugal have allowed us to tuck away enough for hard times. It's a nice feeling to have some extra money in the bank.
Living Below Our Means
Prior to the last few months, we had used our extra money on house improvements or to take a vacation. However, even though we have had less expenses lately, we are still living like we don't have any additional money. A few years ago, we eliminated our cable and gardener because we were on a tight budget. While it's sometimes tempting to get these services again, we know that we are saving close to $2000 a year without these luxuries.
I'm not at my optimal financial health yet. After all, we still have a mortgage to pay off and a retirement account to build up. However, as far as money goes, I feel like I'm in pretty good shape.
*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.
More from this contributor:
- Financials Industry
- Banking & Budgeting
- credit card debt