Image Source: Evati Digital Library
The economy has been steadily expanding for the last nine and a half years. Looking at how the average American is doing though, it’s clear that most people could use more help when it comes to financial fitness. Eight out of 10 people recently surveyed by the National Endowment for Financial Education (NEFE) stated that they plan to set a financial New Year’s resolution for 2019. More than half of the respondents also expressed that the inability to save money is the biggest cause of financial stress in their lives.
Simply planning to make a change is an essential first step. It gets you on the right path and helps build a sense of confidence that allows you to take control of your financial situation. Keeping that change going can be hard, as we all know from the way health club gyms suddenly get a lot less busy in February as new year’s resolutions fade. A great way to improve the odds of long-term success is to find tools or coaches to help keep you on track. Evati Advisory (a digital financial advisor) works with its clients the same way that a trainer in a gym works to help people identify a path to meet their goals. The advisory uses a mobile app to help people identify financial goals and then provides helpful ideas and regular feedback through the app to keep you on track.
A Look at the Data
- While the numbers are improving thanks to this extended economic expansion, we still have a long way to go. The most recent household survey by the Federal Reserve board reported that 40% of U.S. households still cannot cover a $400 emergency expense.
- The good news is that just over half of the respondents to the NEFE survey feel that their financial life is about what they expected and 21% say it’s better than expected.
- The bad news is that there is a real gender disparity; 32% of women vs. 25% of men feel that the quality of their financial life is worse than expected.
- The biggest anticipated expenses include the categories we would guess (paying off debt, transportation expenses, and home related expenses).
Advice from the Pros
With a little bit of research, the key themes for how to start to get ahead become very clear.
- Decide to Do Better – Like so many things in life, digging deep and knowing it’s time to make a change will put you on a course that you’ll be thankful for in the future.
- Create A Plan – This can be a very simple or an extremely detailed process. The simple version involves setting a financial goal (I’m going to save for a trip), carefully watching your budget, and starting to set aside funds every time you skip something. The complex version involves really digging into your finances, building a detailed budget of where you are and where you want to be and then identifying what you can change. You can learn more about goal based planning in a recent article at Inspire by Evati.
- Make the Easy Changes First – Like so many things in life, just paying attention and tracking the results can really start to make a difference. Some of the basics include eating out a little less, walking more and using ride-sharing services less, cutting the cable cord and picking one of the streaming services, and skipping some unnecessary splurges like the next really cool toy for your pet.
- Look Back and Learn – When you look back at how you spent money in 2018 are there any things that jump out that you can avoid like the phone upgrade that really didn’t live up to expectations?
- Set and Forget – You’ll really build momentum if you start using some of the modern apps that have been built to help you automate your newly found habits by carving off the savings you’ve found and moving them into a virtual vault that you can use for future fun.
An App Can Really Help
At Evati Advisory, we’ve designed an app to line up with the modern lifestyle. Our saving and investing process starts by picking a goal and assigning a picture to it. We also have an easy feature to set up a recurring transfer from your bank account to start building towards your goal. We’re working on a “round ups” feature too that will allow you to round up your purchases from a debit card and swipe that spare change automatically towards your goal.
There are even more great features on the way, but the most important part is to just start. It’s amazing how little steps can quickly lead to a very big and positive change.
To learn more about ways to simplify your investing habits and start on your path to financial fitness check out more posts at Inspire by Evati.