Financial Wellness Checklist

Updated: Aug 31, 2020


Does it ever seem like everyone has their finances in order except for you? Does the very idea of figuring out how to get started becoming financially fit seem overwhelming?


If gaining control of your finances is on your to-do list for this year, see below for six steps to help you understand where you are at financially and where you can go.

  1. To start off, a great rule for budgeting and saving is the 50 - 30 - 20 rule, in short:

  • 50% of your income goes to Needs - these are your "must-haves" - rent, bills, groceries, etc. 

  • 30% of your income goes to Wants - your non-essentials; what gets your mind in a good place - dinner out with friends, gym/wor kout classes, concerts, movies, drinks, travel, etc. 

  • 20% of your income should go to Future You - Saving/Investing. If you are reading this and thinking I can barely save at all! I get it. Start with 1%, then 5%, then 10%,etc. If you’re thinking 20% saving is low, AMAZING, you are ahead of the curve, have you started investing yet?


2. Debt Control - Pay off your high-interest debt FIRST

This is anything with an interest rate of over 4-5%. Credit card debt anyone?? Did you know that the average interest rate on a credit card is around 17%! So if you are carrying a debt on your credit card, you are throwing money at it in interest. Also, student loans - they are unfortunately a part of life for many people. You can look at re-financing your student loans to get the interest rates down (Commonbond, SoFi, etc.) Or, make a plan of attack to pay off the loans with the highest interest rates first!


3. Build up a 6 Month Emergency Fund

LIFE HAPPENS! (world-wide pandemic anyone? Never get yourself into a situation you cannot leave due to finances - a bad relationship, living situation, job, etc. Before investing your money, build up a 6 month emergency fund, this is your cushion. This is how much you are spending monthly and multiply that by 6 to be safe. Build this up, put it into a high-yields savings account so it can grow, and do not touch it! Lastly, keep 1-2 months spending in a checking's account, this is money going in and out of your account frequently. 


4. Invest in your 401k

I do not recommend investing until you have paid off high-interest debt and built up your emergency fund EXCEPT when it comes to your 401k. If your company has a 401k plan with a match, this is FREE MONEY. I repeat FREE MONEY! I hate that the 401k is called saving for retirement when it is really investing for retirement. You are not putting money in there and nothing is happening, when you sign up for a 401k you are choosing where you want your money invested. Please note: if your company's match is say 3%, you have to put in at least 3% to maximize the benefit of the match. There are great tax benefits to investing in your 401k as well! 


5. High-Yield Savings Accounts

Most banks have an APY (annual percentage yield) of about .01%. Did you know you could be making over .8%+ APY (rates subject to change) on your savings? By switching your savings to a bank that offers a higher APY, you could be earning exponentially more a year by doing nothing. High-Yields brokerage firms are FDIC insured just like traditional banks so your money is protected. Some good brokerage firms include Marcus by Goldman Sachs, Ally Bank, Betterment, Vio Bank, and CIT, but it is important to note some traditional banks are beginning to offer higher APYs as well.


6. Invest, Invest, Invest!

Want to know a secret? You do not need to know as much as you think you do to get started.. Once you have completed steps 1-5, you are ready to start investing. Tips to investing - start as early as you can and invest consistently. The earlier you start investing, the longer your money has to compound (grow on itself). If you want an additional retirement investment option, I recommend a Roth IRA as any growth on that is tax-free!


A few great platforms are Robinhood, Vanguard, TD Ameritrade, Wealthfront, Ellevest, etc. If you do not want to choose the stocks or ETFs (exchange traded funds) yourself, you can opt for an online brokerage firm that offers a Robo-investor that will choose your portfolio for you based off of your risk tolerance.


As opposed to trying to pick the best individual stocks, another good option is to pick ETFs or Index funds. These allow you to buy portions of hundreds or thousands of stocks at once. For example: VTI (ETF) encompasses +3600 of the top stocks in the US and has returned ~7.3%/yr since its inception in 2001 (as of Nov. 2019).


Lastly, on investing, please do your own research and pick the funds that are right for you. Once you have done some research and started investing, understand that the market goes up and down. There is no way to time the market. When it is down, do not panic and take all your money out. This is a great opportunity to buy more at a lower price to balance out your portfolio. The market will go back up!


Now, you have a handful of guidelines to take control of your finances in 2020. It is up to you to ask yourself what money means to you and how you can use these guidelines to start or continue building the wealth you have always imagined! 

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Legal Note: I am not a licensed financial advisor. The information that I coach is based off of my personal research in finance, and should be taken as such. I will introduce you to concepts and educate you in the field, but I will not advise you to invest in certain assets etc. 

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