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Financial wellness is part of overall wellness and for many, money is a source of stress. Taking the time to understand your current finances and plan for your future can be empowering and life-changing. It can give you more confidence to enjoy a life where worries about money are at the bottom of your list.
Personal finance is affected by so many variables. There is no one-size-fits-all approach to saving, investing or planning for retirement. However, understanding where you are now financially is the first step to improving your finances and setting yourself up for success.
Personal finance expert, Eryn Schultz (Founder @ Her Personal Finance) shared some tactical tips for preparing now for your financial future.
Spend less than you earn.
Implementing daily, weekly, or monthly financial habits now will ultimately set you up for success in the future. One key practice is to be mindful of what is going into your account, and what is coming out of your account, each month. This can be challenging to keep track of when many of us are juggling Venmo, different checking accounts, and credit cards. Try simplifying all transactions to one account for one or two months to get a clearer picture.
Automate your retirement savings.
The process above will help with consistency, so how do you turn that into results? You add your personal motivations. Think about what motivates you at the beginning and end of each day and write it down. Repeat it as a mantra and allow it to serve as your north star through everything you do.
Home buying put into perspective.
When you are ready to buy a home, most people have the same starting question. How much can I afford? Here are some quick formulas you can use to find the answer:
- Home expenses should be less than 28% of your gross income.
- Home expenses + debt should be less than 36% of your gross income.
- Your down payment should not exceed 50% of your net worth.
Some of these metrics are commonly used among lenders, but they are also best practices to keep in mind to maintain financial flexibility. After all, your home is just one asset. The more you spend, the less you have available to spend on things that bring you joy. It’s never too early or too late to start planning for a better financial future. Start with the end in mind. Make that first step, practice good financial habits, and be consistent.
Want to learn more? You can stream the full event recording here.
Thank you to all of the WISE partners for making this event possible and our panelists for sharing their time and advice.
