HABITS that Build Financial Well-Being

October 7, 2019
Financial Education, What's New?

HABITS that Build Financial Well-Being

October is Financial Planning Month. What is the definition of Financial Well-Being?

According to the CFPB, financial well-being is defined as:

“A state of being wherein you have control over day-to-day, month-to-month finances; have the capacity to absorb a financial shock; are on track to meet your financial goals; and have the financial freedom to make the choices that allow you to enjoy life.”

With this definition in mind, SAM suggests these guiding principles for structuring your financial habits:

Spend less than you earn – Bolster your savings and reduce your expenses. Remember, just because you can have something doesn’t mean you need it.
Save for future spending – Get yourself into a habit of saving. Start simple by taking advantage of any automated savings or investments that exist. Then build your habit, checking in as you get closer to your goal.
Only borrow what you can afford – Don’t deny yourself, but avoid spending for an outward show or status symbol. Consider the loss to your long-range goals when you choose to spend now. Remember, every dollar borrowed today is a dollar less to spend tomorrow.
Grow your money – Work with a financial or tax advisor to structure investments so you can gain tax advantages. Contribute as much as you can to employer-sponsored retirement plans, especially if your employer makes matching contributions.
Boost your earning capacity – Even as your earnings increase, try to live off a set income level and add to your investments. Allowing your interest-earning accounts to grow will help you offset any downturns or emergency expenses.
Protect what you have – This applies to not only insurance for yourself, your property and income, but also your investments.

FREE Financial Counseling is provided by Cardinal Credit Union. To speak to a counselor, please call 440-266-2200.