Five ways to improve your financial health

It's the beginning of the year and it's that time where everyone thinks about goals for the new year.  Many are thinking about ways to improve their own health by better eating and exercise – what about your financial health? Are there some things you can do to help your financial health?  Here are some things to consider, any one of them or all of them could help you improve your financial situation.

-Create an emergency fund.  One thing we know will happen in life is an unexpected event – cars breaking down, job losses, medical emergencies.  A rule of thumb is to have at least six months of income set aside for emergencies.  Start taking a little out of each paycheck until you reach that cushion.  You may want to open a new savings account at another bank to make it harder to spend that money. If it's too easy to get into, you may spend it instead of saving it.

-Pay down credit card debt.  Credit cards create bad debt and that can be harmful to your financial health.  Pay down your credit cards by starting with the one with the highest interest rate. Pay more than the minimum payment so you are making a dent in the principal balance. If you have high interest rates on your credit cards, you may want to see if you can transfer the balance to a zero or low interest card- but check the transfer fees to make sure it's worth doing. Sometimes you may feel it's better to pay off a smaller balance card to eliminate one card, then start working on the next one – that works too – just keep going! Once you pay off a card, take the amount you were paying on that card and add it to another card. Over time you can eliminate that credit card debt!

-Save for the future.  Are you saving for retirement? Use an online calculator to see what you need to save to meet your retirement goals.  Don't forget to save for other expenses such as children's college funds.  You may want to talk to a financial planner to get started.

-Evaluate your mortgage payment.  If you have had your mortgage for a while, you may want to talk to a loan officer and review it. Is it possible to refinance to save some money?  Maybe you can increase the amount you are paying and pay off your home sooner.  If you are renting, maybe it's time to buy a new home.

-Live within your means.  As you grow in your career and start to earn more money, be careful that you don't let your spending increase also.  Focus on building wealth by finding a lifestyle that you are comfortable with. I frequently tell clients that they do not want to be housepoor- you want to be able to enjoy life, not just make a house payment.  Live within your means, put extra money towards savings that will last and enjoy your life.

Achieving financial health may take time, but you can get there – just take it a step at a time!

Leslie Vanderwerf,  NMLS ID#335509, American Mortgage & Equity Consultants, Inc, An Equal Housing Lender, NMLS#150953 - Email - Website

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Currently a Senior Loan Officer at Cross Country Mortgage LLC, it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

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