June 27th is Financial Health Matters Day! In honor of Financial Health Matters Day (or FinHealthMatters Day), hundreds of personal finance experts around the country will be educating their communities on financial literacy. As a part of this partnership, today’s post will be outlining what financial health means to me.
My Facebook status eight years ago today was: “I am having the worst week ever.”
I remember it like it was yesterday. It was a warm Thursday during the summer of 2009. I was feeling lost, afraid, and confused. I just lost my job and was wondering how I would pay my bills.
Thankfully I had a small amount of money saved – only about $1200. In addition, I was owed one full paycheck.
Immediately I set a plan into action for survival – financial survival. I made a budget based on the money I had in savings and what was owed to me in my paycheck to figure out how long I could survive. Even though I didn’t have many bills (just rent, utilities, and my cell phone), I would still need money for food. In addition, the money I was able to come up with would only last two months at most but I wasn’t sure how long it would take to find another job.
After talking with a friend who went through a similar situation, I went to apply for unemployment. While I was approved for unemployment, the amount received per week wasn’t very much due to the hours that I worked at my previous job. This forced me to lean even harder on my budget and make some sacrifices.
- I stopped eating out and started cooking more. Pinterest became my best friend. I found meals that were very inexpensive to cook and didn’t require many ingredients.
- Immediately, I stopped going out with friends. I knew going out with friends meant spending money which I didn’t have.
- Lastly, I found new activities to enjoy that were free like working out at the free gym in my apartment complex and taking a walk at the local park.
After that experience, I knew I had to change my life. I was blessed to find a new job within a few months and didn’t face eviction or going without food but I knew I never wanted to be in the situation. I knew I needed to do whatever possible to make sure I never felt those same feelings of financial desperation. When I got caught up on all of my bills, I took the following steps to improve my financial health:
- First, I set out to make a realistic budget that I knew I could stick to with my new monthly salary. Making and sticking to that budget really was the beginning of improving my financial health.
- Secondly, I started saving money for each pay period in order to fund my emergency fund. At first, it was only $50 per paycheck, but I was able to slowly increase that until my emergency fund was fully funded.
- When I would receive additional money in the form of bonuses or even my tax refund, I would put at least 75% of that money to improving my financial health. That means putting money in my savings account and then paying off debt.
- I worked on paying off my credit card rapidly. I maxed out the credit card when I was unemployed to make ends meet. So I committed to paying off the credit card as soon as possible.
- In addition, I started investing for retirement. Although it wasn’t much, I contributed 3% of my salary towards retirement so that I could receive the company match.
Financial health means something different to everyone. However, to me, financial health means being financially prepared for your future and whatever may come. Here are a few startling stats regarding the state of financial health that encourage me to continue educating millennials about personal finances:
- According to a survey by GoBankingRates, 69% of Americans have less than $1000 in savings to cover a financial emergency.
- 43% of Americans struggle to pay bills and credit card payments.
- 18% of consumers pay 91% of the billions of dollars that financial institutions collect in overdraft fees.
- 57% of Americans say they are struggling financially.
- According to the Economic Policy Institute, about half of Americans have no money saved for retirement at all.
Now that I have explained what financial health means to me and one of the many reasons that I am so passionate about financial literacy, it is your turn to chime in.
What does financial health mean to you?
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