Here are some essential tips for achieving a financially healthy lifestyle.

Manage Your Money

Develop a budget that works for you. Understand your income and expenses to identify areas where you can cut, reduce spend, or negotiate better deals. Anticipate personal changes that may impact your income, such as a job switch or a family situation change, and adjust your spending and saving accordingly.  As you budget savings for future goals like buying a home, funding college educations, and saving for retirement, don’t forget to factor in the impact of inflation and rising rates.

Monitor Your Credit

Check your credit report regularly. Your credit score may affect your ability to get a job, rent an apartment, buy a home, or get insurance. Take advantage of free weekly credit reports from the three official sources— Equifax, Experian, and TransUnion—using the federally-authorized website, AnnualCreditReport.com.  Reviewing your credit report can help you detect fraud or identity theft early and can also help you identify ways to strengthen your credit score.

Take Control of Your Debt

Prioritize paying down your debt. Most households have multiple types of debt, primarily from mortgages, auto loans, student loans, and credit cards. Start by paying off balances with the highest interest rates first (credit cards!) as this can save you a substantial amount in the long run. Look for opportunities to consolidate high-interest loans into a single loan with a lower interest rate. Make minimum payments to minimize interest costs and maintain your credit score.

Evaluate your debt to income ratio. If you’re in the market for a home, it’s important to know your debt-to-income ratio (DTI) before applying for a mortgage. Most conventional mortgage programs will require a DTI of 45% or less, meaning a maximum of 45% of your gross monthly income is allocated toward your total monthly debts, including the new mortgage payment. Paying off or restructuring your loans can lower your DTI.²

Plan for student loan repayment. If you have federal student loans, don’t count on loan forgiveness. The good news is you may be able to refinance your student loans at a lower rate or to a shorter term, which could save you thousands.

Prepare for the Unexpected

Build Your Emergency Savings. One third of Americans have more credit card debt than emergency savings and over 40% have less saved for emergencies than they did a year ago.³  In an uncertain economy, it’s more important than ever to have an emergency cushion. Even if you start small, saving a little from each paycheck will get you closer to the three-to-six months of emergency savings experts recommend.

Take advantage of group benefits. In addition to your health insurance, you may want to take a closer look at supplemental health benefits like accident, critical illness and hospital indemnity insurance offered by your employer or your alma mater. These affordable plans can help with much-needed cash benefits during health emergencies.

Review your life insurance to make sure you have enough coverage to protect your loved ones financially. Your income, mortgage, and education costs increase over time, and with those changes comes a need for more life insurance. If you don’t have life insurance yet, consider it sooner rather than later since younger healthy people benefit from lower premiums.

Protect your Assets

Safeguard your property. Make sure you have appropriate auto and home (or renters) insurance to protect yourself and your property. Periodically review your coverage to see if you can save money by switching carriers or bundling your policies.

Protect your most important asset – your ability to earn an income – with  long term disability insurance.  A 2023 survey reported that nearly 70% of people wouldn’t be able to cover their living expenses for just one month if they lost their primary source of income.⁴ If you have disability coverage through work, make sure you understand your benefits and consider filling the gaps with an individual policy.

Review your estate planning documents regularly, including wills, health care proxies, powers of attorney, and beneficiary designations on life insurance and retirement accounts. Ensure they reflect your current wishes and keep the contact information up to date.

Plan Ahead

Make the most of your retirement accounts. Maximizing your retirement account contributions is the easiest way to consistently build your nest egg. If you have a 401(k) or other employer-matched savings vehicle, make sure you contribute enough to earn the full match.

Protect your retirement assets from the rising costs of care. Consider long term care insurance, which covers expenses for care in nursing homes, assisted living facilities, or services at home. Planning for long term care before you need it can significantly impact costs, care options, and your peace of mind.

Achieving financial wellness is an ongoing process. Regularly reassess your financial plan as your circumstances and goals evolve. The Alumni Benefits Program provides tools, resources, and discounts that can help you every step of the way.

¹ 2022 PwC Employee Financial Wellness Survey,  pwc.com/us/en/services/consulting/business-transformation/library/employee-financial-wellness-survey.html.

² Libby Wells, ^“What is the best debt-to-income ratio for a mortgage?” Bankrate, com, October 10, 2022, https://www.bankrate.com/mortgages/why-debt-to-income-matters-in-mortgages/#ideal.

³ Lane Gillespe, “Bankrate’s 2023 annual emergency savings report,” Bankrate.com, February 23, 2023, https://www.bankrate.com/banking/savings/emergency-savings-report/.

⁴ “Bankrate’s 2023 annual emergency savings report.