The economy is tight and experts do not see it turning around any time soon. So unless you have a very generous boss who will give you a raise big enough to satisfy all your wants and needs, you will have to live within your means if you want to be financially healthy.

One secret to financial health is your spending habits. The other secret is that your spending habits lead to your credit scores; and your credit scores circle back to your financial health.

To know where to improve your spending habits you need to first know what those spending habits are. Let’s look at some of the ways that you can improve your spending habits and thus your financial health.

Secrets To Improve Your Financial Health:

Spend Less:

  • Take your lunch to work.

If you eat out at work every day, the average take-out lunch costs around $8 and you eat lunch out 5 days a week, that equals $40.    The average cost to take your lunch to work is probably around $3, multiplied by 5 days a week, and you only pay $15.   Voila for a weekly savings of $25.   A savings of twenty-five dollars a week comes out to approximately $100 a month, for an annual savings of $1200.    That is a lot of money you just saved by simply packing a lunch.

  • Stop using bottled water.

Your office should have a water cooler and at home you can buy water filters for your faucet that gives the same quality water as well as bottled water and is less expensive.

  • Financial health and cutting back on daily cafe' lattesCut back on your daily cafe’ lattes.

By making your coffee at home, you can save a lot of money.   You can make the same fancy coffee drinks at home that you buy at the coffee houses, for a lot less.   If you buy a cafe’ latte or other fancy coffee every day at $4 each that equals $20 a week, $80 a month and $960 a year.   One secret to getting financially healthy is to cut back on your daily cafe lattes.

Save Money:

  • Downsize cable/satellite.

Customize your package to more closely meet your actual need; downsize the package if there are more channels than you will ever use.  Negotiate with your cable/satellite company at the time your contract renews for a better deal.   These companies want to keep your business so often have deals that they are willing to offer you if you just ask for them.

  • Change your calling plan minutes.

Switch to a calling plan that offers the amount of minutes you actually use.   If you carry over your plan minutes every month than you are obviously paying for more minutes than you use.    Save money, change your package.   Rolling over your extra minutes every month is a waste of money.

Credit Cards:

  • No Balances.

Don’t carry a balance on your credit cards, you are just wasting money on interest charges.    The secret to avoiding a balance is to avoid charging up more than you can pay off.   If you pay off the balance in full every month you not only save money on interest you also help to raise your credit scores.

  • Pay On Time.

By paying your credit cards on time you will save money on late fees and interest charges,   By paying on time, you help to raise your credit scores.

Credit Scores

  • Credit Scores Above 750.

Credit scores above 750 are considered to be good credit scores. By raising your credit scores above 750 you will save money on insurance premiums, mortgage, credit card and loan interest rates, utility rates and much more.   Credit reporting agencies consider credit scores of 850 to be perfect. 

  •  Credit Scores Below 750.

Credit scores between 300 – 750 are considered by creditors to be bad credit scores.   The biggest disadvantage of having a bad credit score is that you pay much more for everything. 

  • Get Help

If you want a good credit score and you know you need credit repair help, look for some credit repair services to work with.   These credit repair services are there for exactly that purpose…credit repair help…it’s okay to seek out help.

  • Financial health and credit reportOrder Your Credit Report.

Order a free credit report once a year from the 3 national credit reporting agencies.  These credit reporting agencies do not verify the information they receive, they simply report it, so mistakes can be reported that may incorrectly lower your credit score.   By ordering your free credit reports once a year, you can more closely monitor the errors and correct them.

Insurance:

  • Shop It.

You should shop your insurances once a year.    If you find an insurance company that equal the strength and rating of your  current insurance company and they offer lower rates, it’s okay to switch carriers.

  • Your Coverages.

You should review your auto and home insurance coverages once a year and make any appropriate changes.    For example, if your car is older you may not need the same coverages that you did when it was brand new.

You should also check out your deductibles.    By raising your auto and home insurance deductibles you will lower your premiums.    Be careful though, if a higher deductible only saves you a few dollars, it may not be worth changing because at the time of a loss you will have to pay more out-of-pocket costs.

The secret to your financial health through your insurance is to annually review your insurance premiums, coverages and deductibles.

Miscellaneous Ways To Improve Your Financial Health:

  • Car pool to work if possible – you will all save on gas money.
  • Cut back on your dry cleaning.
  • Make a grocery list when you go shopping – you will avoid impulsive buying.
  • Clip coupons, they really, really can save you money.

You cannot cut back or stop everything; and that is not what we are suggesting; but having a list of ideas of where to cut back if you can never hurts.

You do not have to make large changes to your spending habits to make a big impact; little changes can go along way. When the economic forecasts are gloomy you do not have to be.

It’s not what you make – but what you keep that counts.   Fine tune your spending habits and you will beat the gloomy economic forecasts.