1 Assess your financial situation
Understanding your financial strengths and weaknesses can help you take control of your financial situation. Your aim here is to look at all aspects of your finances, which could include:
- Budgeting and organizing your money
- Planning for retirement
- Saving and investing for other needs
- Dealing with debt
- Protecting your health and wealth (including the risk of disability)
- Safeguarding your family and possessions (including insurance and estate planning)
- And more
If your employer offers a financial wellness program, it may include the chance to request a comprehensive assessment of your financial well-being. If you have access to a financial professional, he or she can certainly help you.
Whether you get help or conduct your own assessment, take the time to look at your financial priorities. And try to set some clear actions you can take to improve your situation, which could include learning more about the financial topics that interest or concern you.
2 Review your budget and spending
Your expenses and spending patterns can change over time, especially when the costs of goods and services increase. It’s important to do routine checks of the money you have in various accounts, what you’re bringing in and spending—and where you may be falling short.
With online access to your bank and investment accounts, you have the basic information you need to review your budget. There are also online tools you can use to link all your accounts, so you can have a clearer picture of your overall finances. Many of these tools also let you set goals and do budgeting right within the program.
Some workplace retirement plans provide access to these tools, at no cost to employees.
3 Start or rebuild your emergency savings
Have you dipped into your emergency savings to manage through an unexpected expense? If so, this is what it’s there for—to help you through an emergency without having to borrow from credit cards, banks, friends, or family.
Remember to replenish it to prepare for the next emergency, whenever it may come. Consider setting up an automatic fund transfer from your bank account into a separate emergency savings account, so you’re not tempted to spend it.
4 Manage your debt
Look at your outstanding debt and identify:
- How much you owe and to whom
- The interest rates you’re paying
- If you’re making the minimum payment or more
Consider paying more than the minimum amount if your debt is causing you stress or becoming a large part of your budget.
5 Save for retirement
Don’t forget to keep your long-term goals in focus, including building for the future. Contributing to your workplace retirement plan is one of the easiest ways to prepare for your financial future. It’s also one of the most effective ways, since you benefit from automatic payroll deductions and important tax advantages.
How much should you save in your workplace plan? There are a few ways to decide this, including:
- Saving at least enough to earn your employer’s full matching contribution—and more, if you can
- Once you’re in the plan, increasing your plan contributions regularly yourself or through automatic annual increases, if your plan offers this option
- Basing your contributions on your projected retirement expenses—which some workplace plans make available online
Keep in mind that every dollar you save today has the chance to grow over time with the help of compounded earnings.
Help is available and nearby—so consider using it
It takes time and effort to plan your finances, but there can be a big payback in peace of mind.
Whether you’re in your 20s, 30s, 40s, 50s, or 60s, your financial needs and priorities will change over time. It’s important to factor this into your planning. The good news is help is available. Many employers offer financial wellness programs and/or access to a financial professional, and most retirement plans offer retirement planning and other tools to help you—so make sure you’re aware of all the resources that you've got available.
Taking action can help you reduce your stress and feel better about your financial situation. So, consider these six tips and use the ones that apply to you. Check in at least once or twice a year on your progress and adjust your approach as necessary. And enjoy the good feeling that comes with helping to keep your finances on track.
If you participate in a John Hancock retirement plan, you may log in here.
This content is for general information only and is believed to be accurate and reliable as of the posting date, but may be subject to change. It is not intended to provide investment, tax, plan design, or legal advice (unless otherwise indicated). Please consult your own independent advisor as to any investment, tax, or legal statements made.