Hacks for Managing Your Financial Health

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For many of us, the recent COVID-19 pandemic served as an eye-opener as it forced us to face the reality of our finances. We witnessed salary cuts and job losses, which forced many to realize the importance of caring for their long-term financial health.

Amidst the world’s worst health and financial crises, it became more evident than ever that the only way to survive was to rethink our financial habits. So if you’re wondering how to manage your financial health, here are a few actions that can help you weather any storm.

Separate your personal and business bank accounts.

Separate your personal and business bank accounts.

It’s not uncommon to find entrepreneurs who struggle with separating personal expenses from business expenses. However, this isn’t always the best option in the long term. Separating your personal account number from your business account number can help ensure that you’re not tempted to dip into your savings when your business needs a financial boost. Additionally, with a separate business account and debit card, it’s much easier to keep track of your company costs for tax purposes. That way, it’s easy to track every payment voucher and invoice during tax season.

Moreover, separate business bank accounts and professional-looking tax return envelopes are simple ways to ensure that your business maintains a professional front while protecting sensitive information and personal assets.

Diversify your portfolio.

Remember when your parents warned you not to put all your eggs in one basket? This rule applies to everything in life, but it’s especially important when managing your financial health. This is why any savvy financial advisor or portfolio manager will always advise that you diversify your portfolio to avoid becoming the victim of a financial crisis.

Portfolio diversification typically involves having a balanced asset allocation mix and not restricting your investment to a specific asset class. For instance, cryptocurrency is a high-risk tolerance asset while a mutual fund account can be considered low risk and the perfect investing strategy for retirement plans. Therefore, to manage your financial health, you should consider using a DIY portfolio rebalancing tool to rebalance your portfolio and ensure that you’re financially secure even in uncertain times. The portfolio manager tool removes the need for spreadsheets, eliminates the requirement to log in to your broker account to conduct transactions, and assists you in sticking to the long-term goals of your portfolio allocation.

Have an emergency fund.

Have an emergency fund

With many Americans falling into debt daily, it’s incredibly important that you seek ways to avoid debt and focus on generating more assets. This is the key to maintaining healthy finances. Setting up an emergency fund is one way to ensure that you’re not tempted to incur more debt at the slightest financial setback. Emergency funds serve as instant cushions for unplanned expenses such as auto repairs or medical bills. It also gives you peace of mind if you lose your job, become unable to work due to illness, or need to pay for a big auto or house repair.

Experts advise that an emergency fund should be easy to access (liquid fund) and should total at least three to six months of your living expenses to help deal with these stressful situations and keep your focus on getting out of debt.

Ask for help.

Let’s face it: No one person has all the answers, even when it comes to finances. Therefore, it’s always a good idea to ask for help if you struggle with your finances. Whether it’s your friend, family member, or financial professional, speaking with someone about your money troubles can help put things into perspective, prevent you from making more dreadful mistakes, and boost your financial management confidence.

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