Financial health
If you are sick, you rest, see a doctor, take medication, and do other things to get feeling better. You may eat chicken noodle soup, or take the day off work. What do you do if you are financially sick? Financial health is an important part of our life. However, just like when you are physically unhealthy, you have to make real changes to see real results. If you continue to eat like crap, and not exercise, you will continue to be unhealthy. The same holds true for finances. If you continue to spend more than you earn, not save, and think that someday when you make more money you will be better off, you will continue to be financially unhealthy.
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The following are the basic principles of financial health:
- Pay yourself first. You have to keep a portion of what you earn for yourself. This is a way that you will shore yourself up for rainy days, and the way you will obtain money to invest and build your fortune with. If you do not pay yourself first, then at the end of each month there will be nothing left to give yourself, so make a habit of it.
- Have a spending plan. If you do not have a plan for how your money will be spent, you will never be able to control your spending. Words like "budget" are restrictive, however, the idea is still important. Know where your money needs to be allocated so that you can spend it appropriately and not overspend. Spending plans help keep you out of debt, and help keep you in the right side of the track financially.
- Eliminate debts quickly. If you want to be financially healthy, you have to stay out of debt. Basically, if you have debts, you are paying to use money, so everything you buy costs the dollar spent, plus twenty more cents or so in order to spend it before you have it. If you eliminate your debts, you are not paying to spend money, and thus, you will be able to free up money, and not be a slave to obligations.
- Control your spending. You will never be financially healthy if you do not control your spending. While the urge to spend is natural, there are some big disadvantages to buying more than you ought. If you control your spending you will be far happier. You will have money to spend when you need something, and you will find that you will have long term pleasure, rather than just instant gratification.
- Invest your money. If you want to have financial health, you need to invest your money so that you are not always the one working for money, but can have your money working for you. If you let your money earn more money, you will eventually be able to retire and not have to work, and still have a continual flow of income coming in. This means your retirement will be great.
