FANANCIAL HEALTH
"Your Health is Your Wealth"
It is true that this cliche refers to physical health. However, your financial wealth can be your health too; if it prevents stress, depression and excessive worry about your finances. Financial health is important for achievement of your short, medium and long-term financial goals. As with your physical health, you do not have to be a helpless victim.
If you fail to plan, you plan to fail
The mere act of setting goals and establishing a written plan is extremely effective, yet most people don’t bother doing it.
In the book, What They Don’t Teach You at Harvard Business School, Mark McCormack cites an interesting study of students in the 1979 Harvard MBA program. The students were asked, "Have you set clear, written goals for your future and made plans to accomplish them?" Only 3% of the graduates had written goals and plans; 13% had goals, but they were not in writing; and a whopping 84% had no specific goals at all.
In 1987, Harvard followed up, and the findings were astonishing. The 13% of the class who had goals were earning, on average, twice as much as the 84% who had no goals at all. The most eye-opening result of the study was that the 3% who had clear, written goals were earning, on average, ten times as much as the other 97% combined.
Knowing the power of having a plan -- specifically a written plan -- According to a recent national survey conducted by American Express Financial Advisors, only one in ten Americans have a written financial plan, yet overcoming their financial concerns tops the “wish list.” The survey shows that Americans spend more time worrying about their finances than managing them.
The good news is there is ample opportunity to improve these statistics. The internet is full of tools to assist in the planning process, and there are many professionals who offer educational workshops for a small fee or no fee at all. A small investment of time can yield big returns when it comes to planning for the future.
Ten Tips for Financial Health
In periods of economic decline many people find themselves squeezed from both sides – facing both rising prices and a loss of income. With constant media reports on how the economy is heading towards a recession you may be worried about how you are going to pay your own bills. While you may not have control over the economy you do have control over the actions that you take to prepare for possible financial difficulty.
- Bring your lunch to work every day. Food is almost always cheaper at a supermarket than a restaurant.
- Separate wants from needs. Do you really need that 42 inch flat screen television?
- If you need to buy a car, buy one with a higher MPG (miles per gallon).
- Create a spreadsheet to keep track of your spending. If you know where your money is going, it will be easier to make changes if you need to.
- Avoid using credit to pay your bills.
- If you have a direct deposit for your paycheck, have some of your paycheck directly deposited into your savings account.
- Avoid spending a significant amount of money on things like gifts and vacations.
- Reduce your services. Can you get a cheaper cable package or have no cable at all? If you have a cell-phone consider cutting your land-line.
- Instead of purchasing a book or magazine or renting a video, go the library. It’s free!
- Try lowering your energy bill. Turn off appliances and lights when they are not needed. Purchase energy efficient light-bulbs. When you can, try using a fan instead of air-conditioning and putting on a sweater instead of turning on the heat.
It is true that this cliche refers to physical health. However, your financial wealth can be your health too; if it prevents stress, depression and excessive worry about your finances. Financial health is important for achievement of your short, medium and long-term financial goals. As with your physical health, you do not have to be a helpless victim.
If you fail to plan, you plan to fail
The mere act of setting goals and establishing a written plan is extremely effective, yet most people don’t bother doing it.
In the book, What They Don’t Teach You at Harvard Business School, Mark McCormack cites an interesting study of students in the 1979 Harvard MBA program. The students were asked, "Have you set clear, written goals for your future and made plans to accomplish them?" Only 3% of the graduates had written goals and plans; 13% had goals, but they were not in writing; and a whopping 84% had no specific goals at all.
In 1987, Harvard followed up, and the findings were astonishing. The 13% of the class who had goals were earning, on average, twice as much as the 84% who had no goals at all. The most eye-opening result of the study was that the 3% who had clear, written goals were earning, on average, ten times as much as the other 97% combined.
Knowing the power of having a plan -- specifically a written plan -- According to a recent national survey conducted by American Express Financial Advisors, only one in ten Americans have a written financial plan, yet overcoming their financial concerns tops the “wish list.” The survey shows that Americans spend more time worrying about their finances than managing them.
The good news is there is ample opportunity to improve these statistics. The internet is full of tools to assist in the planning process, and there are many professionals who offer educational workshops for a small fee or no fee at all. A small investment of time can yield big returns when it comes to planning for the future.
Ten Tips for Financial Health
In periods of economic decline many people find themselves squeezed from both sides – facing both rising prices and a loss of income. With constant media reports on how the economy is heading towards a recession you may be worried about how you are going to pay your own bills. While you may not have control over the economy you do have control over the actions that you take to prepare for possible financial difficulty.
- Bring your lunch to work every day. Food is almost always cheaper at a supermarket than a restaurant.
- Separate wants from needs. Do you really need that 42 inch flat screen television?
- If you need to buy a car, buy one with a higher MPG (miles per gallon).
- Create a spreadsheet to keep track of your spending. If you know where your money is going, it will be easier to make changes if you need to.
- Avoid using credit to pay your bills.
- If you have a direct deposit for your paycheck, have some of your paycheck directly deposited into your savings account.
- Avoid spending a significant amount of money on things like gifts and vacations.
- Reduce your services. Can you get a cheaper cable package or have no cable at all? If you have a cell-phone consider cutting your land-line.
- Instead of purchasing a book or magazine or renting a video, go the library. It’s free!
- Try lowering your energy bill. Turn off appliances and lights when they are not needed. Purchase energy efficient light-bulbs. When you can, try using a fan instead of air-conditioning and putting on a sweater instead of turning on the heat.
