While it may not be glamorous, looking after your financial wellbeing is as important as taking care of your physical health. This doesn’t just mean maintaining a good credit rating, although that is part of creating a good financial status. It also involves looking after your day to day finances and your future needs. This overview can show you the areas you need to consider in establishing your financial wellbeing.

Build a Budget

The first thing to consider is your income versus debt ratio. This means listing each source of income in one column and each debt in a separate column. By comparing these totals, August Funding suggests that it’s easier to develop a workable budget. Your goal should be to make all of your debt payments on time, while having enough left over to build a savings account. This may require eliminating luxuries that you have taken for granted until now. Try to identify and eliminate expenses that don’t really serve a purpose. For instance, buy your coffee in bulk instead of stopping at Starbucks for that latte every morning.

Start a Savings Account

This savings account should be designated for emergencies and special expenses, so you should resist the urge to withdraw from it whenever possible. The account should only be accessed to help you pay for high-end home repairs, auto repairs, and medical expenses. You can start by depositing just 1% of your monthly income into the account, but you should try to increase the size of your deposits over time. Financial experts suggest depositing enough to cause a slight economic crunch, but not so much that you’re in danger of falling behind on your bills.

Start Chopping Away at Your Debt

You should also set aside some money each month to pay off your debts and August Funding recommends using the snowball strategy. This involves starting with your smallest debt and paying extra on it, while meeting your minimum required payments on your other debts. Once that debt is paid off, all of the money you were diverting to paying it off should be added to the payments on your next smallest debt. Continue following this strategy until all of your debts have been repaid. Once you’re debt free, the extra funds can be deposited into your savings account to help you stay free of debt.

Start Investing in Your Retirement

Many people think of relocating to a tropical climate, or consider tinkering around the house, when they think of retirement. In fact, retirement may be more costly and more complex than that. It will be around this time that your health will begin to decline, and you may end up needing expensive medical care or around the clock assisted living services. Most people find that they’re financially unprepared for these expenses and end up having to rely on loved ones or state social services to help them cover these costs. However, starting an IRA, 401k, and other retirement investment accounts early will help you earn the money you will need to cover these costs.

Don’t Put Off Estate Planning

You may feel young and healthy now, but that’s no reason to put off making end of life plans. An accident or illness can claim your life at any time. Even worse, you may end up unable to communicate your medical care wishes or financial concerns for an indefinite period of time. If you fail to address these concerns with an estate plan, the custody of your children, your assets, and even the final wishes you have for your remains may all be in jeopardy. An estate planning attorney can help you create the powers of attorney, will, and other documents you’ll need to ensure your wishes are carried out. This is especially important if you have minor children to consider.

A Second Gig May Be Needed

If you’re thinking this is a lot to consider, you’re not wrong. It may require picking up an additional source of income on a temporary basis. Fortunately, the internet has opened up a world of opportunities. You might begin by starting to offer your skills as a freelancer. You may even gain enough clients to quit your regular nine to five job. If you’re talented in the arts, try selling your creations online. Alternatively, many employers are looking for remote, or work from home, employees. You might try any of these suggestions, or all of them, to help you make more money each month. The additional income will help you meet your obligations and build up your wealth gradually.

The concerns listed here can help you build a strong financial backbone for yourself, but it can be a devastating mistake to think you only need to consider these issues once. To the contrary, you should review your financial needs yearly. As your life changes, so will your financial concerns.