We talk often about our medical and mental health and the importance of both, but how often do you consider your financial health? If we really think about it, the latter can certainly have an effect on the former two. So what can you do to keep yourself in the pink, financially…and out of the red?
Know your numbers. Rather than simply having a pretty good idea of what you have in the bank, it will help you financially to know your net worth and set a personal budget for yourself. In simplest terms, think of “net worth” as the comparison of what you own versus what you owe. Put together a list of your assets (what you own) and your liabilities (what you owe), subtract the liabilities from the assets, and that result equals your net worth.
Set up a personal budget. Checking your net worth yearly will help you to better put together your personal budget. Budgeting allows you to save for goals, anticipate expenses, and reduce (or even eliminate) expenses. A monthly personal budget helps to avoid mindless spending, something seriously detrimental to financial health. Use that list of liabilities in terms of bills and other expenses and figure out how to get the major expenses taken care of every month so you can spend intelligently and prepare for possible emergencies, as well as focus on spending versus saving. Regular budgeting over time can significantly improve your financial health because you’ll get in the habit of tracking all of your money.
Avoid spending more when you make more. As our salaries and money coming in increase, we tend to spend accordingly; it’s natural that if we have what we consider extra money, we feel we can live a little more extravagantly. If you can manage to keep that in check and put some of the newfound wealth into savings, you’ll put yourself in a better position in the long run to deal with emergencies and get ready for retirement. Again, think of it simply: Spending more now means having less later.
Distinguish between needs and wants. That personal budget will help you accomplish this — you need to get your bills paid and cover basics such as groceries and health insurance. You have to exercise care when it comes to such purchases as everything from new shoes to a new car and perhaps take a step back and ask the question, “Is this something I truly need or something I want?” Sometimes that line gets blurred — you may “need” a new car to have something safe for your family, to get to and from work, and the like. But do you “need” a top-of-the-line model, or can you find something a little less extravagant that fits your budget?
Not taking control of your money can put you at a true disadvantage down the road. Do what you can today and moving forward to give yourself the cleanest possible bill of financial health.
For more tips, read our related blog posts or reach out to the professional staffing team at Medical Professionals today!
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