Are you financially healthy? Just like your physical health, maintaining your financial well-being requires time, effort and most importantly, good daily habits. From regularly checking your accounts through your online banking to planning for retirement years in advance, it's important to plan well and develop good financial habits.
Below, nine Forbes Finance Council members each share one important (but often overlooked) habit that can help improve your financial health.
Clockwise from left: Charlie Youakim, Elle Kaplan, Darryl Lyons, Evan Kirkpatrick, Ismael Wrixen,... [+]
1. Don't Outspend Your Income
It's so easy to get caught up in buying things: houses, cars, clothes, trips, etc. Make sure you're spending well within your income. Leave deficit spending to the government and stick to a spending plan where you can easily make payments with room to spare. - Charlie Youakim, Sezzle
2. Save For Retirement Early And Regularly
The majority of Americans are woefully underprepared for retirement. Instead of scrambling and using up more wealth later in life, you can prevent this by investing for retirement early. Due to the immense power of compound interest, a few dollars put away now can become a fortune by the time you're ready to retire. Even if you start small, make this a habit now and you'll thank yourself later. - Elle Kaplan, LexION Capital
3. Give 10% Of Your Income Away
Practically speaking, systematically giving 10% of your income provides yourself margin in life. Should something happen to your income, you have created a little wiggle room to survive. Second, giving allows you to recognize those who are hurting and hungry. By doing so, research has shown your point of reference in life is realigned and you appreciate what you have. - Darryl Lyons, PAX Financial Group LLC
4. Automate Decisions
The key to effectively managing your money is eliminating as many ongoing decisions as possible. Commit to an exact dollar amount or percentage for saving and invest what's necessary to reach your desired outcome, set up automatic contributions, and review quarterly. Don't overthink it or attempt to randomly remember the amounts. Let technology execute your plan for you. - Evan Kirkpatrick, Wendell Charles Financial
5. Regular Review
People don’t look at their money. That’s why they make bad decisions and can’t seem to stay on top of their finances. People should be logging into their online bank account two or three times per week to review income and expenses. Then, they should also take that opportunity to move some money, even just a small amount, into savings. - Ismael Wrixen, FE International
6. Conduct Regular Internal Audits
Be sure to review your P&L often to ensure your revenue streams are matching expenses. Companies of all sizes can experience massive P&L swings and they can be devastating if a company is ill-prepared. - Ryan Marquis, Plastc, Inc.
7. Understand (And Follow) Your Financial Limits
Financial health is financial responsibility. If times are tough, watch what you spend and don’t overspend or tax your company, then assume it will be OK later. If you can not afford to fund or purchase something, then don’t; robbing Peter to pay Paul will put more financial stress on your business and more stress on the management team than it will provide a benefit to anyone. Know your limits. - Robin Hall, VARC Solutions
8. Get The Proper Insurance Coverages
Many people forget that protection is just as important as accumulation in financial planning. Having the proper life, long-term disability and long-term care insurance can protect and insure the financial future of you and your family. I've seen a lot of clients overlook planning for long-term care for themselves and their aging parents, significantly depleting their retirement savings. - Jacob Alphin, Rillhurst Capital
9. Learn From Successful People
Rarely does anyone achieve overnight financial success. It takes time to develop strong habits and see investments grow. Surround yourself with highly successful individuals and their habits will "rub off." Be an apprentice. Adapt the culture of those who have succeeded and study how they grew to lead you to your own success over time. - Ibrahim AlHusseini, The Husseini Group
