Evaluate Your Financial Future: 5 Ways to Improve Your Financial Health

How financially prepared are you to handle life’s unexpected changes? Are you planning ahead for near- and long-term goals that you feel are most important? What can you do to ensure you are improving your financial health?

According to a 2022 survey from YouGov for Forbes Advisor, nearly half of Americans without emergency funds now plan to start building savings. Saving for the unexpected comes in many forms, including unforeseen repairs and expenses, career stability and life changes such as paying college debt, saving for that dream trip or honeymoon and starting a family.

For many this may seem daunting, but don’t be left behind and unprepared. Start by setting realistic financial goals with your priorities in mind and establish a routine to save for what’s most important to you now and for your future self.

April marks Financial Capability Month and is a reminder for all of us to reflect upon our spending habits, start saving more, seek ways to better plan for our financial goals and improve our financial health.

Something I’ve found to be effective is to simply commit to putting away what you are able to each month. Keep it simple and establish a regular routine of saving are great ways to start down the path of improving your financial health. It’s also something that can be easily done whether you’re a student, a recent grad beginning a job or a new parent.?Starting early and instilling habits now will shape positive financial behaviors and outcomes for a lifetime.?

Here are five easy ways to help you improve your overall financial health and wellness:?

• Revisit your budget.?Creating a budget will allow you to better understand your current spending, help you identify money to save and feel more in control of your finances. Start by reviewing your expenses and totaling them into categories, like groceries and utilities, and assigning those categories into needs and wants. Next, measure your actual spending against your total income to find the difference – or how much you can begin saving.?Through your bank’s mobile app, you have 24/7 access to your accounts and can monitor activity anytime, anywhere.?
• Establish or?strengthen your credit score.?Developing healthy credit card habits and having a?good credit score can help you qualify?and earn better interest rates when you’re applying for a mortgage or a car loan. To begin to improve your credit score, take small steps like paying your bills on time and paying down debt.??
• Prepare for unforeseen financial burdens. After a turbulent two years of the pandemic, we’ve all come to expect the unexpected. Evaluate your budget for simple areas to cut back and reroute unnecessary expenses to savings. Saving even a few dollars each month is a great start to help you prepare for the unexpected. Make regular contributions to a separate emergency fund, so you are not tempted to touch it for non-emergencies.???
• Create habits that will then become routine. Saving through automatic savings tools creates a routine without adding to your to-do list. Consider steps such as allocating a portion of your paycheck to savings each month or digital tools that round up debit card purchases to the nearest dollar amount and transfers change from your checking to savings account.?
• Set financial goals.?A smart savings strategy should incorporate goals. Setting short and long-term goals can help motivate you to stick with saving and inform your strategy. In 2021, Americans said that their top financial goals were to increase current savings amount (42%), pay off credit cards (27%) and build up an emergency fund (25%).?Leverage your bank’s digital platforms?to help you set and track financial goals based on your life priorities.??

We work each day at Bank of America, alongside our clients to educate and support them no matter where they are on their financial journey. We’re committed to providing educational resources like Better Money Habits to help everyone plan and achieve their financial goals.

And remember, there is no better time than now to start focusing on your financial health.?