More and more Americans are taking the initiative to eat healthier or get in shape (or both!), and that’s a good thing. In that light, we’d like to suggest focusing on another goal for the workforce: getting financially fit.
Here are seven tips you can offer employees to help them get their finances in order, get out of debt and improve financial literacy.
1. Forgive and forget your past financial problems.
It's going to be tough to get financially fit if you are focused constantly on mistakes you made last year, last week or even this morning. You're only human, so you're going to make mistakes. Still not quite ready to let the past go? Consider saying the following: "I forgive myself for losing control and ordering the venti latte when I really only needed the tall," and move on.
Now that you have forgiven yourself for past mistakes, ask yourself what you learned from them. Maybe you racked up too much debt over the holidays by making a few too many impulse purchases. What can you do differently to avoid that in the future? The financially savvy reflect on their mistakes and most come to the same conclusion about what they need to do: start budgeting.
2. Create a streamlined budget for financial freedom.
If you follow only one of these financial tips this year, make it this one: create a budget and learn to stick to it. Keep in mind that budgeting is just like any habit — it will take some time and practice before you get it right. Before you do anything else, start tracking what you are currently spending.
Track your spending with whatever tool you choose for at least two months and you'll probably start to see some areas of spending that might surprise you. Highlight these problem areas (eating out, coffee runs, shopping sprees, etc.) and keep them in mind for areas where you may be able to reduce spending when you start budgeting.
3. Allow room for indulgence.
One of the best ways to throw your financial fitness right out the window is to become too strict. We all need to indulge a little to stay on track. If we constantly deny ourselves the things we love the most, we will eventually cave into the pressure and unhappiness and make huge mistakes. Studies have shown that willpower is a limited resource — you can only resist so many temptations before you will give in.
The best financially fit, savvy minds in the world will tell you that you have to make room for indulgence in the budget to keep you on track. Add in a date night or a mini-vacation here and there. Reward yourself when you hit a savings goal with a night out or a movie.
4. Spring-clean your budget.
Are you paying $180 a month for satellite television and all you've watched in the past six months is season after season of your favorite shows on Netflix®? Cancel your satellite. Or consider the tall versus the venti. A little spring cleaning makes for a happy budget, and we recommend that you periodically do just that to save a few dollars here and there.
5. Live by the 24-hour rule.
Great financial literacy often begins with a simple question: Do I really need this item right this second? The 24-hour rule helps you avoid impulse buys and unnecessary purchases. If you see something while browsing online that you believe you just have to have, put it in your online cart and walk away from the computer. Leave it there for 24 hours to give yourself time to think about the item. The next day, you'll know for certain whether it's something you truly need or just something that you want.
6. Make financial planning fun.
If you're having fun while you get your finances into shape, you are much more likely to stick with your budget. Think of it like this: does doing the same boring fitness routine every day motivate you to get in physical shape? You enjoy it more when you can change it up and swim, bike, jog with a friend or head to a crossfit class.
Getting financially fit is the same way. One great way to make budgeting more enjoyable is to make it a competition. For example, challenge your spouse to see who can come up with the least expensive but most delicious dinners for a week. Challenge each other to see which of you can go all week on one tank of gas. When it's a game and there is a winner at stake, it's a lot easier to enjoy your budgeting than when it's just a series of no's.
7. There's an app for that.
One of the easiest ways to revamp your finances is with a few great apps. Find what works for you, download it and then use it. There are apps that track your coupons for you on your phone so that you can use them when you walk into a store without digging around your bottomless bag. There are apps that track your spending and send you big, bold, red messages when you go over. These days, tracking expenses is easy with free apps and websites like GoodBudget™ or Mint™.
Interested in learning more about how legal insurance can benefit you and your employees? Contact us for more information.
