Improving One’s Financial Health

A December survey by the National Endowment for Financial Education (NEFE) finds more than two thirds (68 percent) of U.S. adults will make a financial New Year’s resolution for 2017. Saving money (53 percent) tops the list, followed by managing debt (44 percent). Sadly, one in three (31 percent) rate the current quality of their financial life as worse than they expect it to be and more than three quarters (78 percent) say they wrestle with financial stress.

The survey also finds that nearly half (48 percent) of Americans admit that they are living paycheck to paycheck. More women than men live paycheck to paycheck: 51 percent versus 45 percent. 20170227 FinancialHealthThe main reasons people believe they are living paycheck to paycheck are due to credit card debt (24 percent), employment struggles (22 percent), and mortgage/rent payments (18 percent). Americans cited the most significant financial setbacks they experienced in 2016 as transportation issues (23 percent), housing repairs/maintenance (20 percent), and medical care for an injury/illness (18 percent).

NEFE found higher income provides little protection. While 85 percent of adults earning under $50,000 per year report being stressed, the percentages don’t improve much for people earning $50,000 to $74,900 (80 percent are stressed) and $75,000 to $99,999 (79 percent).

NEFE offers the following advice for those hoping to improve their financial lives:

“Get debt under control. Set a goal to reduce your debt load next year by five to 10 percent. That might mean reducing impulse shopping. Six in 10 people admit they purchase on impulse and 80 percent of those regret purchases afterwards. When you face temptation, walk away for at least 30 minutes and see if you still want it and it’s a good idea.

Start saving now and do so often. Common advice tells us we should have six to nine months of income set aside. Again, set a goal–start with as little as $500. Of course, more is better, but by starting small you gain a sense of security, a sense of goal achievement, and you reduce stress.

Shop for better services. Where can you come up with $500 for an emergency fund? Make a game out of shopping providers to find the best value in the services you use. How long has it been since you shopped your insurance policies? Any chance you can save money on your cell phone plan, internet or utilities?

Understand what’s behind your financial decisions. Ever wonder why you feel good about spending money on vacations, but avoid saving for retirement? Why you buy new golf clubs, but procrastinate when it comes to giving your kids an allowance? The answer may lie in your unique life values and how they influence your financial decision making. Take the LifeValues Quiz to better understand your values and attitudes about money.

Of course, you may also want to consider talking to a financial advisor or mentor when it comes to setting goals and creating a plan.

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