Financial health is something that can impact your personal finances and stress levels. Being aware of what elements make up financial health and how to change them may help you improve your financial well-being. There are also several tips for maximizing your financial health that can help. However, if you find yourself moving toward bankruptcy, then talk to a Chattanooga bankruptcy attorney about steps you can take.
WHAT IS FINANCIAL HEALTH?
The way many people describe financial health is how well someone is doing financially. This includes the ability to pay bills and maintain personal finances. Financial health can also be thought of in categories that include:
- Saving money
- Spending money in healthy ways
- Planning for your financial future
- Borrowing money
Saving money means building up a strong emergency fund or savings account. What this does is protect you from future financial disasters and unexpected emergencies. That way, if you face an unexpected expense, you will be able to manage this and recover faster.
Spending money in healthy ways means balancing between paying bills and spending money on leisure activities. Planning a financial future helps you maintain and achieve your financial goals, like buying a home. This also includes purchasing insurance for your health, home, car, and other necessities.
Borrowing money means acquiring debt only when necessary to make a large purchase. This also means paying off debt effectively while building a strong credit score. The Consumer Financial Protection Bureau breaks down financial health into financial health benefits, which include:
- Greater control over your money
- Flexibility in financial decisions
- Moving toward financial goals
- Surviving financial emergencies
In this sense, financial health means having enough money and financial security to feel financially secure. Less financial stress with greater overall control is the main goal.
IMPROVING YOUR FINANCIAL HEALTH
When it comes to improving financial health, there are four main ways to do this. Budgeting, saving and investing, financial protection, and managing debt are what build and maintain financial health.
A budget plan involves tracking your monthly spending and subtracting this from your monthly income. You can use this information to cut out unneeded expenses to sustain a positive cash flow. Saving means building a savings account that covers at least six months of your bills.
Investing means enrolling in some type of retirement plan, whether independently or through your job. Financial protection means choosing the best insurance plans for your unique situation. Managing debt means maintaining low debt and using strategies to pay off existing debt faster.
Using these skills may not be easy at first. However, the more you start practicing these healthy financial habits, the more you will improve your overall financial health.
BANKRUPTCY ATTORNEY IN Chattanooga, TN
Facing bankruptcy can be daunting, but you may not have to do this without guidance. You can reach out to call us at Tom Bible Law today by dialing (423) 690-7712 for a consultation about your financial options. Our dedicated team of Tennessee bankruptcy lawyers is ready to help you explore all your bankruptcy options, given your financial situation. We serve clients in the Tennessee cities of Chattanooga and Tullahoma.