Category: Financial

Financial and personal health is typically considered two different things. Literally, they are different; financial health means how much money you have and personal health means how to fit you are to live your life. But, there is a lot of evidence that shows financial health and personal health are associated. If you have poor financial health, your personal health won’t be great, and vice-versa.

In this post, we will discuss how financial health and personal health are associated and how you can balance them both to lead a good life.

Several reports show people are unable to live a healthy and quality life because of poor financial health. They are unable to visit doctors for regular or any specific treatment and suffer the consequences. Not only this, but there are many other pieces of evidence. But, here will go a bit deeper. We will see how financial and personal health impact or help each other

Impact of health on wealth

Being personally healthy means reducing sickness and disease, maintaining a healthy weight, feeling energized, and having an easier and more comfortable day. Everything seems perfect.

If you are healthy, there are fewer doctor visits that reduce the number or amount of medical bills. Other than this, you become more productive at work which results in more earning power, and experience lower stress levels that help you make better decisions. Most importantly, you can maintain a steady income by keeping your job for a long time.

Impact of wealth on health

With strong financial health, you can take care of yourself and your loved ones. You can afford to buy higher-quality foods, invest in a gym membership, afford preventive medicine, and others. With these, things will be easier and life will be comfortable for you.

If your financial health is poor, you will have a higher risk of disease and live shorter lives because health care services and insurance won’t be affordable for you. There will be no way to live a healthy life with no personal health worries.

Due to poor financial health, people move to wrong habits like smoking and drinking, shortening their lives than expected. Also, people cannot save enough money to support themselves in retirement. And thus, they are unable to pay for critical medical care and are less likely to survive these diseases.

By now, you might have understood that poor financial health is associated with personal health and vice-versa.

How to keep a perfect balance between financial health and personal health

We will mention some common health problems and a financial solution for the same.

If you cannot afford health insurance, consider an alternative but affordable option. You can consider short-term health insurance, apply for a high-deductible plan with lower premiums, visit a free clinic or open a health saving account. With alternative ways, you will avoid a massive medical bill and any debt associated with it will be manageable.

If you have too many medical bills, get a debt consolidation loan. Sometimes, the medical bills exceed and get out of your ability to pay. But, you shouldn’t panic because of the same. The best is to apply for a debt consolidation loan. This will help you pay off your expenses at a low-interest rate as well as you will resolve other forms of debt simultaneously.

These are just two situations. Similarly, you can fight against many health problems without affecting your financial health. You just need to seek help from finance professionals.

As the cost of living is rising continually in the US, it is critical to smartly manage your debt and eventually eliminate it in order to make money and focus on your critical financial goals. Discipline and determination can go a long way to get out of debt and to become economically solvent.

Debt prevents you from making the most of your wealth, which is why debt management is crucial.

Tips for Effective Debt Management

For all those who are struggling to manage their debt, the following tips can greatly help in doing so. Let’s check them out.

1. Know how much you owe.

If you’re struggling with debt, one of the first things you should do is arrange your finances. It will assist you in determining how much debt you owe and to whom you owe it. Keep track of all your bills, including creditors, total amounts owed, monthly bills, and due dates.

A spreadsheet can be beneficial because it can motivate or push you to keep track of your financial commitments. Documenting balances and payment amounts now will save you time later and help you avoid late payments.

2. Put together monthly spending

A well-prepared budget allows you to track how much money is coming in and going out of your account. You’ll gain a better understanding of how much money you spend each month and how much debt you can manage to spend off each month.

3. Determine which debts should be paid off first

Make your debt list a priority. It can be hard to decide which one to handle first, but crossing debts off your list in the correct order is vital.

Certain types of debt are more significant than others. So, start with the debt with the highest interest rate and the high cost. Your credit card shopping is frequently to blame. You’ll save money in the long run if you pay off your credit card debt first.

4. Pay as much as you can.

Although paying a little more each month than you owe is ideal, it isn’t always attainable. However, make your minimum monthly payment to keep your debt from growing. If possible, try to make the monthly payment in full or as much as you can. Remember to pay off any outstanding balances on interest-bearing accounts first.

Making up for missed monthly payments is challenging. Your account may fall into default if you struggle to pay for consecutive months, which has major repercussions.

Minimum payment will keep your account in a decent position and prevent your debt from increasing. You can always pay more if you have more money later. You can stay on track by using monthly debit orders.

5. Reduce impulsive spending.

Allocate a monthly amount for pleasures that you can afford. Since you only have a certain amount to spend, setting this tiny splurge fund or adding a category for indulgences to your budget will allow you to spend money on things you desire without going overboard.

Recognize your impulsive spending triggers and devise a plan to avoid them.

6. Acknowledge when you need help

If you are having trouble paying your debts and other payments on a monthly basis, you may need to seek outside assistance, such as from a financial service firm. A good loan agent can assist you in obtaining personalized, hassle-free loans with lowinterest rates.

Finally, create goals for yourself and remember to celebrate debt reduction accomplishments — within your means. This will help you remain dedicated and motivated.

You’ll need a budget to keep track of your spending and achieve your financial goals. Budgeting is the foundation of better money management and financial planning to avoid financial chaos and crisis at the end of the month. It helps you feel in more control of your expenses, savings, and debts to achieve financial milestones, such as saving for a down payment to buy a new house or building an emergency fund for a secure financial future.

Creating a budget means you know where your money goes each month and where you need to make adjustments to your expenses to meet your monthly financial commitments. In other words, it is the process of monitoring and managing the money flow with a plan to spend money on essential household needs without compromising your financial standing. A budget is solely for the purpose of balancing your income and expenses to secure your future.

How to Create a Budget

While creating a budget may appear to be a difficult task, it is not. There are many ways you can create your budget with some planning and organization skills. You can use a notebook, spreadsheet, or online budget planner to organize your budget. All you need is a template to fill in the numbers of your income and expense. No matter how you fill and track your numbers, here’re the key steps to creating a budget without much knowledge of budgeting and financial planning.

1. Calculate Your Net Income

The foundation of creating a successful budget starts with calculating your net monthly income from all sources. It’s the amount of money you make minus the amount you pay in taxes and other employee benefit programs such as health insurance and retirement plans. It helps you determine the total available money you have to spend on your household needs and other necessities.

2. List Your Monthly Expenses

The next step is to determine where the money is going once you know how much money is coming in. Make a list of all the expenses you expect to incur over the course of a month. To make your spending plans and commitments, try to categorize your expenses into fixed and variable categories.

• Fixed Expenses: Monthly bills such as rent or mortgage, utilities, and car payments fall into this category
• Variable Expenses: Groceries, gas, and entertainment are examples of items that fluctuate from month to month and fall into this category. This is an area where you might be able to cut back to save more. Tracking and categorizing your expenses can help you figure out where you spend the most money and where you can save more each month.

3. Determine Your Average Monthly Spending and Make Adjustments

After listing your monthly expenses, determine how much you spend on each category by looking at your credit card or bank statement to track your spending. It helps you total your monthly income and spending to have an idea on how you are doing.

You’re on the right track if your income exceeds your expenses. This extra cash allows you to allocate funds to other areas, such as building an emergency fund and saving for retirement.

If your expenses exceed your income, you are overspending and should make some changes. Look for areas where you can cut or reduce your spending to meet your budget goals.

These are the key steps to creating a budget without any challenges. After you finish budgeting, the next step is to stick to it. It’s good to track and analyze your spending regularly to ensure that your expenses should not exceed your income. Tracking your spending throughout the month will help you avoid overspending and identify unnecessary spendings.

With interest rates skyrocketing, it has become more crucial than ever to know what your credit score says, and if it’s not in the best shape, take the necessary steps as quickly as possible.

A decent credit score can make your financial life a lot breezier as it will help you qualify for a lower rate of interest on almost everything, be it personal loans, student loans, mortgages, credit cards, and so on.

Having lower rates mean lower monthly bills and improved monthly cash flow. The money you will save can be used on anything from adding to your beefing up a college, emergency, and retirement funds or paying for required home improvement or repair projects.

Clearing your higher-interest debts such as unpaid credit card bills will eventually improve your credit score. However, one of the best and hardest things is to know where to start.

Mentioned below are some tips and tricks that can help you kick-start the process of improving your credit score. Read on to know.

1. Keep your credit usage low:

Are you scared of the term “credit utilization”? Don’t let this term overpower you! This financial term is not that difficult to comprehend. Keeping credit utilization low and in check is the quickest way to improve your credit score. Credit utilization generally stands for how much credit you are utilizing compared to the total credit limit. Optimally, you must aim to keep your credit as low as possible.

2. Be an authorized user:

Another trick to improve your credit score is to become an authorized user on your mate or loved one’s account. This trick can be exceptionally beneficial if you fail to increase your credit limit and you have someone who is comfortable with you becoming an authorized user of their credit card.

The only drawback is that you will face the “you will also be responsible for clearing the dues” line by your card partner. If the primary account user doesn’t fail to pay, it will reflect on your credit report as well. Not everyone allows adding an authorized user, though.

3. Pay your bills on time:

Clearing dues on time plays a great role in making and breaking your credit score. Just one missed or late payment can impact your credit report for up to seven-year. Hence, do whatever it takes, but ensure to pay bills on time. If you are bad at keeping dates, sign up for automatic payments.

4. Check your credit report:

A single error on your credit report could hinder the growth of your credit score. Thus, fixing it quickly can increase your credit score more than you have ever anticipated. Fortunately, there are many ways to check your credit for free. Once you have your credit reports, look for errors. Precisely check the below-mentioned information of each account:

• Name
• Address
• Social Security number
• Employment history

In case you notice any error, raise the credit report error immediately.

5. Do not close your old accounts:

Do you know how effective your employment history is on your resume? Similarly, your old credit accounts can display whether you are reliable or not. Also, your credit history impacts approx 15% of your credit score.

As you will be lessening your total available credit, shutting down your old accounts can increase your credit utilization rate, lowering your credit score. So, keep your old accounts open!

Wrapping Up:

We comprehend that improving your credit score is not that simple; however, it is not even impossible! If you are just starting to develop your credit or trying to re-build the same, it can be considered a gradual process. But with the above-mentioned tips, patience, and focus, you will be heading toward a higher credit score.

If you still can’t improve your credit score, feel free to get in touch with us today. At First Fruit Financial Services, our team is always ready to help!