The FDA, USDA, and Department of Health have long recommended certain basic rules when it comes to keeping up with your health. They recommend a balanced diet, abstention or cessation of smoking, a minimum of alcohol consumption, and 20-30 minutes of exercises 5 days per week. If we all adhered to these basic recommendations, we'd be a lot healthier than we are. We know, we know... It's harder than it sounds!
As familiar as we are with the federal government's health recommendations, what about its recommendations for financial health and well-being? How many of us know what those recommendations look like?
Fortunately, the Financial Industry Regulatory Authority, FINRA, has released some basic guidance for those of us who struggled to achieve financial wellness. Like the governmental guidelines for maintaining good health and ensuring longevity, the financial rules are as simple as they are hard to follow. Take a look.
Five Tips for Improving Your Financial Health and Well-being
1) Save for College and Retirement Using Tax Breaks
Did you know you can use tax-advantaged savings accounts if you have financially dependent children? According to FINRA, only 41 percent of Americans are setting aside money for their children's college tuition. With tuition costs rising steadily every year, it pays to save.
2) Beat That 'Debt Sentence'
Consumer debt is a huge burden on Americans. According to FINRA, around 40% are carrying more than they should. The best way to combat the credit card bloat is to pay off your cards in full; or at least pay more than the monthly minimums.
3) Don't Chase Returns
Many retail investors are impatient. They want high yield investments, but when they really think about it, they don't want the risk associated with them. That mindset sets the stage for investment scams of all kinds, which promises huge returns with no risk. Be smart: know yourself and always bear in mind that there is no way to beat the risk-reward relationship.
4) Build an Emergency Fund
According to FINRA, 34% of Americans they surveyed would be unable to come up with $2,000 if they needed it for an emergency next month. If you don't have enough savings to get yourself through a medical emergency or sudden unemployment, you're far too vulnerable to life's vicissitudes. Start saving by putting away as little as $40 per month and by next year you'll have your $2,000.
5) Keep an Eye on Your Credit
Americans are entitled to a free credit report every year. Take advantage of the new rules by checking both your credit report and your credit score. Both are important, and may surprise you. While most Americans believe they have above average credit, many of them are wrong - or their scores have changed since they last checked.