You know what they say: 20/20 is hindsight. It’s easy to look back and think… if only, but dwelling on the past doesn’t get you anywhere. In fact, most often, it only serves to further stall you.
If you have regrets—financial or otherwise—today is the day to stop ruminating. Today is the day to make a change and move forward boldly by investing in yourself.
By committing to your monetary health, you’ll not only have more financial freedom, but you’ll also foster a sense of overall wellness. As our founder, Kathy Entwistle says, “money is choices, money is options.”
Here’s how to get started:
1. Build an emergency fund
Establishing an emergency fund—liquid money that’s easily accessible and readily available to cover unexpected costs—is one of the most important things you can do for your financial health.
Aim to set aside three to six months of your monthly expenses. This will help you cover your costs in case you lose your job, are unable to work due to disability, or incur any major unexpected medical expenses.
While the hope is, of course, that you may never need these funds, having this kind of money stowed away will not only help prevent you from going into debt, but will also undoubtedly save you stress and heartache.
2. Plan for retirement
Experts say most people spend between 55 to 80 percent of their annual income every year during retirement. Unfortunately, though, 25 percent of Americans haven’t saved for retirement at all. We get it: It may seem like you have plenty of time. But the truth is: Saving for this period of your life now is crucial to your well-being later.
Most experts recommend setting aside about 15 percent of your pre-tax income to retirement. You can do this in various types of investment accounts, including a 401k, a Roth IRA, or a traditional IRA.
Don’t forget to examine all avenues for saving, too. If your company has a matching policy, are you maxing it out? Can you increase your contributions? Remember: Even a single percentage point can make a difference in the long run.
3. Improve your credit score
Your credit score—a number, typically between 300 and 850, that’s assigned to you based on the information in your credit file (payment history, amounts owed, etc.)—has real-life ramifications. It’s your financial DNA—aka your perceived financial trustworthiness.
A negative score can be very costly in the sense that it directly impacts your interest rates on loans (including mortgages), limits on credit cards or loan amounts, access to credit card rewards and interest rates, car insurance premiums, and even your ability to rent or own a home.
Pull your credit score regularly—at least once per year—to make sure all information is accurate and complete. If there’s anything incorrect, contact the company reporting the information to resolve the issue as soon as possible.
And if your credit score is lower than you’d like, take steps to improve it. This includes paying down existing debts on time, only using a portion of your allowable credit limit (usually experts recommend under 30 percent), and working with a credit repair agency if necessary.