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Workouts for Your Wallet: Strengthening Your Financial Health

As we enter the second month of the new year, we all know someone who has made a resolution or set a goal around health, fitness, and money. Some of us could be trying to pay off debt, build an emergency fund, get in better shape or lose weight.

We challenge you to spend February focusing on your financial health and we are here to help. By strengthening your financial health, you will be able to build a more robust and resilient financial future.

Much like you assess your physical fitness before you jump into something new, we encourage you to assess your financial fitness levels. Some things to take a look at are your income and expenses, savings and emergency fund, retirement accounts, investment accounts, insurance coverage, debt levels, and credit score.

Warm-up: Create a Budgeting Routine

Your budget is the foundation of your financial health. Tracking your income and expenses requires consistent effort. Some things to keep in mind while budgeting:

• Make sure your budget is realistic.
• Track your income and spending habits for a few weeks.
• Determine essential expenses and non-essential expenses and consider cutting out some unnecessary spending.
• Create your budget so it aligns with your financial goals and reflects your actual income and expenses.
• Get input from all parties involved in the spending.
• Regularly review your budget to ensure it remains realistic and effective.

Cardio: Boost Your Income

Boosting your income can significantly improve your financial situation. Some ways to increase income could be:

• Enhance your skills or acquire new ones to make yourself more valuable in the job market
• Explore side hustles or freelance opportunities related to your skills. Platforms like Upwork, Fiverr, and TaskRabbit are great to find freelance gigs.
• Monetize your hobbies or talents.
• Drive for Uber, Lyft, or DoorDash.
• Speaking with your employer regarding additional hours or tasks.

Strength Training: Building a Strong Emergency Fund

Life is unpredictable and that includes financial emergencies. Whether it’s an unexpected medical expense, a car repair, a sudden job loss, having a stable emergency fund is your safety net. The recommended amount to save is 3-6 months of living expenses. This may seem very daunting but start somewhere. Some tips for starting and building an emergency fund:
• Create a separate bank account for your e-fund. Something not tempting to access.
• Start small if you need to. $10-20 per month will add up.
• As your financial situation improves, increase the amount you contribute.
• Use windfalls wisely, such as tax refunds or bonuses. If received, use some of the funds to build your emergency fund.

Remember, building your emergency fund is a gradual process and consistency is key.

Endurance: Long Term Financial Planning and Investing

Before you get too far into financial planning and investing, set short-term and long-term goals. These can include saving, starting a business, planning for retirement or paying off debt. Once your debt is under control, you have established an emergency fund, and created a budget, consider finding a financial advisor. They will be able to help you plan for retirement, education funding, estate planning, and long-term investing. Your advisor can help you develop a personalized investment plan with clear goals and strategies. While investing, make sure you tax plan!

Cool Down: Regularly Review and Adjust

In all areas of financial health, it is important to regularly review and adjust when necessary. If you are working with a CPA or financial advisor, they will check in with you on a regular basis. While reviewing your finances, you want to take a look at your budget, review and reassess your financial goals, review your emergency fund, and celebrate your milestones!