August is Wellness Month. Besides your physical health, it’s also important to focus on your financial health. After all, without a secure financial foundation, one must deal with the stress of not knowing how to pay bills and may struggle to afford aspects of life that are essential to one’s health such as healthy food or quality medical care.
1. Learn to differentiate between a want and a need
Food is a need, but restaurant meals are a want, as financial advice guru Suze Orman states often. Before you buy something ask yourself whether it’s a want or a need.
2. Resist impulse purchases
Stores are set up to get you to spend more money. Typically, items you don’t need that they hope you’ll buy on impulse are placed prominently in your line of sight. A good way to resist impulse buying when you shop is to make a list prior to going to the store and stick to it.
3. Buy a gently used car that you can afford
Kelly Blue Book states cars often depreciate 60 percent of their original purchase price in their first five years. 30 years ago, used cars were often synonymous with problems. However, times have changed. Cars now last longer and their reliability has increased dramatically. Consult this list of reliable used cars from Car and Driver to help find a good used car for you.
4. "Use it up, wear it out, make it do, or do without"
This is a popular adage from World War II. It’s a great way to live your life. In a sense, when you give away your money, you give away your power, so don’t spend money that you don’t have to. Instead, when you save, you give yourself the gift of financial security.
5. Think critically about marketing messages
Marketing is everywhere in our society. It’s not just in commercials on TV but also shows up as product placements in movies and music videos. Even your friend on social media talking about a great new product may actually be a paid representative of the company they’re touting!
Numerous fallacies are used by marketers to manipulate unsuspecting people into giving up their money. For example, commercials may tell you if you buy a product it will make you better looking, have more fun, or that “everyone” is buying it. This list of 14 marketing fallacies from Indeed will help you identify these tactics so that you’re not taken advantage of.
6. Be creative!
Take on a do it yourself project or give home made gifts for Christmas. When you decide to think creatively, you can often find great solutions that don’t involve spending a lot of money.
7. Use credit cards wisely
Credit cards are a huge industry and trap many people in debt. Credit card companies aggressively target college campuses to get young people hooked on credit. While having a credit card can be a smart way to take advantage of rewards like airline miles or cash back, always pay your balance in full at the end of the month to avoid having to pay high interest rates.
8. Have multiple streams of income
Even if you have a secure and well paying job, you can never know for certain what tomorrow holds. Even companies that are considered impeccably stable and secure can go bust suddenly. When you have multiple streams of income, you know that even if you lose one it won’t be the end of the world. Consider starting a business or investing in rental properties.
9. Diversify your portfolio
Like having multiple sources of income, it’s also smart to diversify your portfolio. The collapse of banks like Silicon Valley Bank illustrated how major institutions can fail. Even the US dollar, currently the world’s leading reserve currency, is now facing new challenges with the introduction of a new gold-backed currency by a group of the world’s leading emerging economies. Instead of having all your money in the bank or in the stock market, examine a full range of options. Perhaps gold is for you or perhaps an annuity.
10. Plan for your future
Do you have at least 5 months in reserves in case of an emergency? Are you setting aside money for your retirement? Do you have a life insurance policy so that your loved ones are taken care of if something unexpected were to happen to you? These are important questions. If you answered “no” to any of them, why not start today and use the tips on this list to build a more secure financial future for yourself and your family?
Eric Eisenhammer
Eric is an Asset Protection Specialist. He is co-founder of Legacy Defender Insurance Solutions and holds licenses in Life and Property & Casualty insurance. Eric earned a bachelor's in Finance from California State University, Northridge and a Master's in Public Policy and Administration from Sacramento State.
