5 Steps to a Healthier Bank Account

5 Steps to a Healthier Bank Account

Take these 5 steps towards financial wellness.

When it comes to money, the YOU Docs aren't going to tell you what investments to make, but they do want to try to steer you toward making choices that will help you feel better and live longer.

1. Take your financial temperature. While we know that financial burdens can weigh us down, a lot of us would like to ignore the issues until a crisis happens. As you know with your body, the smartest approach is to think about your health all the time—not a few minutes before the ambulance arrives. So instead of burying your head, apply some standards of health to your financial attitudes. Overspending is like overeating (serious aging or a serious price to pay, with no easy answer if it gets out of control). On the other hand, a retirement account is like exercise (do a little bit along the way and the long-term benefits will be exponentially greater than the investment). The fact is, if you treat your money with the same respect and care you ought to treat your body, you simply decrease the chance that you'll need financial CPR.

2. Score a perfect 10. Of all the financial decisions you'll make over your lifetime, this one is a no-brainer. Every time you get paid, take 10 percent of that check and put it into an emergency account. It doesn't count for retirement, it's not used for bills, and it's not something you tap into when you decide that you really, really need an automatic lollipop maker. It's something that will give you peace of mind. Having an emergency backup account to use if the car dies, or your spouse needs an extra hand to help with an illness, or you need to change jobs, or the roof leaks—while still being able to pay bills, save for retirement and make investments—is the thing that will relieve your day-to-day financial stress as much as anything short of winning the Super Six.

3. Save up. Take the second 10 percent of your paycheck and put it in a retirement account—nothing gives you the freedom to follow your passions and to relieve stress more than having a retirement fund (often added to by an employer) and the 10 percent emergency account. But this plan means you have to live below your paycheck, and it means you may need to budget carefully, so you can enjoy these freedoms.

4. Write it down. Carry a small notebook or diary in your purse or bag, and record your daily purchases for one month. At the end of the month, sit down and look at your purchases, and then consider how to cut back. You'll probably be amazed at what you can live without.

5. Ask for an increase. Face it: Your boss doesn't want to give you a raise. It's more money away from his or her bottom line. But does that mean you ought to roll up into a ball of dough when talking about making more dough? No way. The truth is, women earn about 11 percent less than men with equivalent education and experience. In one interesting study, researchers told participants that they'd be paid anywhere from $3 to $10 to play Boggle. At the end, they were paid $3. And guess what happened. Eight times more men than women asked for more money. Similarly, four times as many men as women report that they negotiate for more money during a job offer. The message: Ask, ask, ask.

Medically reviewed in June 2019.

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