3 Ways to Care for your Financial Health
Make cleaning up your finances your next quarantine project.
COVID-19 has already challenged and changed the finance world in so many ways. More people are filing for unemployment every day, the stock market is up and down, and small businesses are suffering now more than ever. Whether or not you have been directly impacted by any of the financial suffering going on throughout the world, now is a great time to take a step back and make sure your financial planning is set up for success.
1. Set Goals
The first step to taking care of your financial health is to clearly define what goals you want to achieve with your finances. Whether your goal is to pay off student loans, save for a big life event, or buy your first home, or just spend less money on take-out and deliveries, write down exactly what you want to accomplish, how much money it will require, and a deadline for accomplishing this goal.
Here are ways you can start setting the groundwork for your new financial plan:
- Evaluate last year’s performance: Take a look at what you accomplished in the last year. What did you do that was good for your goals? What are some ways you could change your behavior? This step is what you make of it — you can think broadly, or itemize a year’s worth of credit card receipts to see exactly where you spent your money. The simplest place to start is to look at how much money came in last year (via income, investments, sales, etc) and how much you saved.
- Think short-term and long-term: When first starting out with goal setting, it’s important to keep in mind the things you want to plan for and accomplish both in the short-term and in the long-term. Do you have any special events coming up? Are you planning to travel in the next few months? Is there something bigger down the line that you want to plan for?
- Get help: If it’s through sharing your goals with your significant other, family or even consulting a professional — getting help can go a long way when it comes to improving financially and planning ahead.
2. Create a Budget
Setting a budget can only take place after your goals have been determined and after a thorough examination of your current financial situation. Take the time to analyze your finances including your income along with the regular payments that you make monthly and your typical spending habits. Be realistic when deciding upon a set budget for each month. Don’t set yourself up for failure and leave some room for leftover funds.
Here are a few tips to help you set and maintain your budget:
- Get Back to Basics: Consider your fixed vs. flex costs. What do you spend every month that does not change? Rent/mortgage, car insurance, bills, can all be considered “fixed costs.” Now think about your “flex costs.” This can include dining out, entertainment, shopping, vacations. How much can you afford to set aside for all of these activities? It is important to be realistic here: yes, you could save more if you never went out to eat for three years, but is that something you can accomplish? When creating a budget, it’s important to make a plan you can stick to.
- What to do with the leftovers: How much of your monthly income is left after your fixed and flex costs? You may need to go back now and trim down your flex costs. Remember, you should always have liquid cash available for emergencies like unforeseen medical expenses or job loss. Decide how much money you’re comfortable putting aside for “liquid savings.” Now determine what to do with the rest. Consult a financial planner on how to diversify your portfolio, research high-yield savings accounts, and make sure you treat the remaining income as “locked assets.” You should not count on touching these, or else you will jeopardize your financial goal.
- Track Track Track! You may think you’re on the right track, but banks can be manipulative and lacking in transparency when it comes to displaying your credit card transactions and payments. That’s why it’s important that you independently document and keep track of your own spendings DAILY. Read more about how to avoid and overcome those spooky things banks do here.
3. Let your money do the work.
Celsius Network allows your money to make you money. With interest rates as high as 10% APR, you can earn a passive income on your savings. Whether you’ve invested part of your portfolio in BTC or other crypto, or prefer the more familiar route of “stablecoins,” low-risk coins pegged to the US dollar, your assets can do the work to bring you to your financial goals.
About Celsius Network
Celsius Network is a democratized interest income and lending platform accessible via a mobile app. Built on the belief that financial services should only do what is in the best interests of the community, Celsius is a modern platform where membership provides access to curated financial services that are not available through traditional financial institutions. Crypto holders can earn interest by transferring their coins to their Celsius Wallet and borrow USD against their crypto collateral at interest rates as low as 4.95% APR.
Download the Celsius Network app and start earning interest on your crypto today!