7 Simple Steps To Improve Your Financial Health

If you’re looking to make improvements to your financial health; it can sometimes be challenging to know where to start or identify what will actually make a tangible impact. Here are 7 small steps that you can do right now to keep you motivated and boost your finances …

Adopting healthy habits in life should include making sure you take care of your financial longevity. Getting organized and being aware of what resources you have can definitely help make your money work better for you. I personally needed a more effective money-related routine, and while I’m definitely not a financial advisor or expert; these small changes have undoubtedly helped set me on a path towards better financial health.

Step One | Get Online Banking

If you don’t already have this set up; do it. Not only does it help you track your spending easily (more on that in step two), it allows you to quickly spot any issues that occur and then deal with them promptly. Additionally, online banking makes paying bills, transferring money to/from other accounts and setting up direct deposits hassle free.

Healthy Habit: Every time you log on, transfer your ‘loose change’ to a savings account that you’re not going to touch for a year. For example, if you have $189.26, transfer the $0.26 to the savings account. It’s not much money but at the end of twelve months, you’ll have some extra cash to pay a bill or put towards something else.

Step Two | Track Your Spending

Carefully look through what you spend your money on, especially subscriptions you pay into each month; cancel anything you don’t use and/or can easily do without. Tracking in this way encourages you to spot other recurring purchases that may also need to be reduced or eliminated altogether; be honest with yourself about what you really need to spend your hard earned cash on.

Healthy Habit: Cancel one subscription and put the fee you would have paid each month into your savings account or use it to increase a bill payment on a credit card (see step three).

Step Three | Increase Minimum Credit Card Payments

Good credit card health should involve paying off the full bill amount each month; however, the reality for many of us is we’re maxed out or unable to afford anything more than the minimum — interest rates ensure repaying in this way is not an efficient use of anyone’s money. Increasing it by $5-$15 (this could be from the subscription you cancelled) will help you pay things off a bit quicker. 

Healthy Habit: Aim to pay off your highest interest rate credit card first; once it’s fully paid off, include that monthly amount onto the next card you’re focusing on.

Step Four | Downsize Your Purchases

Making modest changes to your everyday spending is a great way to get into a healthier financial mindset. Instead of buying the large coffee, get the medium; instead of purchasing the book, go to the library — you get the idea!

Healthy Habit: Reduce the number of times you eat out at restaurants or order takeaway/delivery food each month. The cost of this can be quite expensive and it all adds up pretty quickly.

Step Five | Rethink Small Spending

If you routinely add something to your basket that you don’t need or because its price is low/seems inconsequential; rethinking this will really help you out. Impulse buys, especially ones that cost very little accumulate over time and end up being quite an expensive practice. If it isn’t on your list or a required purchase, put it back.

Healthy Habit: Write a list of what you need to buy and stick to it and make sure you don’t go grocery shopping while you’re hungry; you could end up buying more food than you really need.

Bonus Healthy Habit: Sign up for a grocery rewards card that offers cheaper prices to card members on items throughout the store (these are not credit cards and do not require any kind of monthly repayment). I use mine for all grocery trips; this week my items came to a total of $162.99 but because I was a rewards card member my total went down to $130.99 — saving me $32!

Step Six | Sell Unused Items

We all have kitchen gadgets, bakeware, clothes, electronics, toys, etc. we’ve never unboxed or used. Selling them is an effective way to spring clean and generate some money to deposit in your savings or put towards a credit card bill. There are many sites and apps to advertise your gently used or unwanted items on; (click here for some ideas) so why not make a bit of money while cleaning out your clutter. Win, win!

Healthy Habit: Discover local secondhand stores that will buy your old tech (movies, music and other items). You won’t receive the price you originally paid, but it’s money that can be put to good use.

Step Seven | Outgoing Bills Calendar

Use a wall calendar (or app, etc.) to remind you when your bills are due each month. This encourages planning in advance to fulfil financial commitments and could potentially help identify any upcoming issues; providing you with enough time to make adjustments.

Healthy Habit: Colour code your calendar, so you can clearly identify what’s happening and pick out anything related to your finances. For example, I use blue for household bills and make sure to circle paydays.

All of these subtle financial changes have encouraged me to become more organized and motivated about making use of my money in the best way. While these are workable for me, I’d always recommend going to a financial professional/expert before you implement any changes of your own. 

Do you have any financial health tips? Share them in a comment. Thanks for reading!

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Further Info:

How To Have Better Financial Health in 2022 – Forbes