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7 Steps to Achieving Financial Wellness

October 07, 2022

Financial wellness is a term we use to talk about feeling secure in your economic life. It’s about working toward a state of financial well-being in which you can manage your bills and expenses, pay your debts, weather unexpected financial emergencies, and plan for long-term financial goals such as building college funds or saving for retirement. At Columbia Credit Union, we want to provide all our members with the financial tools to lead healthier, better balanced, and more productive lives. Let’s explore 7 steps to achieving financial wellness for yourself and your family.

1. Creating a Budget

You’ll need to know where you’re spending your money each month. Creating a budget will help you live within your means and set realistic financial goals for your future. You should factor in necessary expenses, leisure spending and savings. Being able to track your regular income and expenses will give you a framework to build all other aspects of your financial life.

2. Building an Emergency Fund

Part of your savings should immediately go toward an emergency fund equal to three to six months of household income. This can help cover expenses should you lose your job or if an unexpected expense occurs. You should also define what constitutes an emergency for you or your household ahead of time so you can properly prepare.

3. Protecting Your Assets

While the emergency fund provides you with some protection, insurance provides more security in other situations. Auto, home, and health insurance can offset large, sudden, and unexpected expenses and losses. Learn about insurance options.

4. Reducing or Eliminating Debt

Understand how much debt you can manage. The more debt you have, the less you can put into savings or investments to grow your wealth. Pay off debt to improve your credit score so you can comfortably borrow money for large purchases like a house or car.

5. Saving and Investing

Putting aside money for savings from each paycheck can add up. Consider different short-term savings options such as traditional savings accounts, money market funds, and certificates of deposit. If your company has a 401(k) or other retirement savings plan, contribute to it. If your employer matches a portion of your contributions, always opt-in. It’s free money toward your future! Learn about savings options.

6. Planning for Retirement or Other Long-Term Goals

The sooner you start saving toward retirement, the more money you’ll have when you get there. Familiarize yourself with other retirement savings options — such as IRAs. Understand how different types of retirement resources — Social Security, retirement savings, annuities, and others — can work together to provide you with retirement income. Learn about retirement income.

7. Meet with a Financial Coach

You can meet with a certified Financial Coach at Columbia Credit Union to talk about all of these steps and more ways to work toward a more financially secure life. Set up a free appointment to chat.