5 Steps to Better Financial Health

by Ron Haynes

Many companies have recognized the importance of allowing employees a “mental health” day – a day to ignore the stresses of work and projects and nit-picky bosses and annoying coworkers. A day off IS a great way to improve your stress levels and your mental health but if your stress primarily stems from your finances, perhaps a “financial health” day would be even more beneficial.

What happens on a financial health day?

A financial health day is a day you set aside to examine your finances in detail and find ways to make improvements. It’s a day you use to tend to your financial affairs with a laser-like focus and it requires a moderate amount of preparation.

Ideally you do this during a work week, on a regular business day (not a holiday). By conducting your personal financial health day on a regular business day, you’ll be able to make needed changes, get information, and actually reach people via telephone or email that day rather than waiting a few days until someone gets back to their desk. Since many people take vacations the same week that holidays occur, you can probably see why a business day is best.

What items should you consider and examine on your financial health day?

1. Examine your bank accounts

cuStudentLoans

Both your checking account and your savings account should be examined. Go ahead and actually balance your checking account (read A Lost Art: Balancing A Checkbook). By balancing your checking account you’ll find out if your bank is charging fees your weren’t paying attention to and you’ll probably also realize the importance of using a bank that rewards you like PerkStreet. You may alternately decide that a bank like Ally is ideally suited to you. 

The point is: if you don’t take a day to investigate, you’ll never know if there’s a better fit for you.

What else are you looking for? 

  • Automatic drafts that have increased without your knowledge
  • Subscriptions you no longer want
  • Spending habits that are out of balance

One of the BEST ways to monitor your spending habits is by using Mint.com (it’s free). services not only allow you to manage multiple accounts in one place, they also offer instant charts and graphs that surface where your actual spending patterns may not jive with what you say your priorities are. For example, you might tell the service that your food bill should be 10% of your monthly spending or less; the service may tell you, in turn, that you’re actually spending 15% of your cash out on food.

Don’t neglect your savings account either. Both ING Direct and Ally Bank have incredibly good offers for savings accounts that have rates much, much better than the national averages. Plus these guys don’t have the fees that most other banks milk from their customers. Haven’t set up a savings account yet? Your financial health day is perfect for getting it set up and establishing an automatic deposit to that account.

2. Check your insurance – ALL of it

Have you ever thought about all the insurance you carry?

We carry a LOT of insurance. I’ve decided we live in a “just-in-case” society these days but insurance is a very important component to our financial health. By taking a day to review your coverages and to make sure your car insurance costs haven’t crept up mysteriously, or that you have enough life insurance on yourself (or your children – read Why I Bought Life Insurance On My Kids) you’ll make sure your insurance coverages are what you need. Your financial health day is your day to shop around with sites like InsureMe.com to make certain you aren’t overpaying … or worse, are paying for the wrong coverage.

3. Review your mortgage and PMI

Are you paying more than you should on your mortgage interest rate? Are you sure? By taking a financial health day to review your mortgage rate, you can confidently know that you’re getting the most for your money. And that’s the point: IT’S YOUR MONEY. It’s up to you to protect it and your mortgage company will not call you to say you could get a better rate from one of their competitors. Make the decision to reconnect to the mortgage market and begin paying attention to the incredibly low rates that are available to you … especially if you’re paying more than one percent over the current going rate. If you are, click through NOW to Quicken Loans or LendingTree for no other reason than to investigate how much you *could* be saving each month. Of course, the precise amount that you personally will save from refinancing depends on your current interest rate, your loan amount and the costs you incur by refinancing, but with potential 2 percent drop in your rate, you’re bound to be much better off.

And don’t forget, if your loan balance has slipped below 78-80% of the value of your home, you could be eligible to eliminate the private mortgage insurance portion of your payment. When I did this I saved $91 each month. Each. And. Every. Month.

Let the banks compete for your business with LendingTree! Click HERE!

4. Check your credit

You’ll need to go beyond getting your free credit report from annualcreditreport.com – you need to know how lenders, landlords, potential employers and other will interpret the data found in your credit report. The interpretation of that data is called a credit score and though it uses the credit report data, it’s far easier to utilize. That was of use is why you also need to get your credit score. You can get a free credit score from:

5. Check your debt

How well are you doing at getting out of debt … especially high interest consumer debt? As you’ve been working though your finances on your financial health day, you may have “found” some money you can use to put toward that debt or you may have even found enough to pay some debt off outright! You can also use your financial health day to set up recurring payments that exceed the minimum payment and thereby get out of debt faster. Every little bit helps and every little bit counts.

Another way to re-work your debt is to use Prosper to get a better rate (and lower payments) for certain consumer debts. You won’t believe the great rates for borrowers.

For student loans, you could potentially save THOUSANDS with a private student loan consolidation from a NOT-FOR-PROFIT credit union.

You can always do more on YOUR financial health day!

Of course you aren’t limited to these suggestions – you could always review your estate plans, your investment portfolio, find a better credit card, interview a financial adviser, establish a budget or even do a home inventory. The point is to take one day to get yourself and your finances in a better position. Then those mental health days will be perhaps even more relaxing!

 

About the author

Ron Haynes has written 988 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.