Financial Health: How to Manage Your Money and Free Up Assets

Written by Optimity Team

(3 min read)

Financial wellness can be a tricky topic for individuals as everyone’s situations are unique. Some people are always looking to improve their current, and financial future, while constantly doing research on how to better themselves. 

There are two important factors to keep in mind when considering your financial status: how well of an understanding you have of your own financial situation and how to capitalize your assets. With the right guidance and information on these topics, improving your financial wellness is almost certain. Keep reading to learn more about how to better manage your money and free up your assets. 

Know What You Owe

Understanding what your own liabilities, debts, or other financial obligations are is the most crucial, yet stressful part of your financial betterment. It can make you feel like you’re drowning if you don’t have proper steps in place to ensure you’re getting yourself on the right track and managing your money better.

Start by making an organized list of what you need to pay each month in order to add it appropriately to your budget later. Some expenses to consider allocating for include::

  • Student loan payments
  • Credit Card Debt
  • Mortgage Payments
  • Utility Bills
  • Car Payments
  • Miscellaneous bills

When putting together your budget, make sure you are accounting for what you owe each month, to which company and the date your payment is due. Use budgeting apps or online savings tools to help you get organized especially as you are not only trying to tackle your debts but save for your future as well. If you can afford to spend money on someone to manage your finances for you, it’s best to hire a financial advisor who can assist you in making the right decisions based on your long term goals. 

Where Can You Save?

Saving for your future can be intimidating, especially if you don’t feel like you have a handle on what you already owe. To make things easier on yourself in the long run, refrain from impulsive purchases, especially when it comes to big ticket items. Plan for these recurring investments and anticipate necessary future expenses within your budget to ensure you will have enough money for these when the time comes. If you haven’t already, set up an emergency fund in case anything goes awry in your life. This way, you’ll have a little cushion to fall back on. 

You can begin by taking small steps to save money for different purchases or investments in the future, or choose the top 3 important things to you and add more money in each month. If actively saving money is hard for you, try these different ways to trick yourself into saving in order to make it a part of your day to day routine. These future expenditures you may need this money for can range from college tuition for your kids, car payments, new house savings, a medical fund or any other necessity.

Finding ways to cut unnecessary spending or cut back the cost of certain bills each month is a great way to take that money and input it into your savings. Sticking to your new reserved income in order to save for the future is important so that you are digging yourself into a deeper hole and will allow you to buy those bigger items or invest more into your family’s future.

Identify Your Assets

A personal asset, by definition, is things you own that have monetary value. Some examples of personal assets are things like your real estate, a boat or car, stocks or mutual funds, even cash or your money in a bank account.

If you ever are looking for ways to obtain some extra money or free up some of these assets, there’s plenty of ways to do so. For instance, you can get money from your home’s value without having to sell it. Look into the benefits of refinancing a mortgage in order to get some extra cash back in your pocket while the interest rates are low. Another way is cashing out on those stocks or bonds if the time is right to put some money into your pocket right away. It’s best to check with your financial advisor first. 

Maybe selling items seems a little more feasible for you and your family. That’s more than fine as there are plenty of ways to make money off of selling your assets. This can be as simple as collecting items you no longer use around the house and selling them on Facebook Marketplace, Poshmark for clothing or your local garage sale. People love finding bargains on everyday items that are in good condition. If you have a second home or camp, look into renting your vacation home out when you’re not there, or even consider selling it if your family no longer uses it.

There are so many ways to utilize your assets and make money off of things that are already in your possession. 

Invest in Your Current Assets

Once you have the appropriate funds you can start making your already owned assets better with improvement projects. If you think you may be interested in selling your home, condo or second home in the near future, look into what renovations need to be done beforehand. It can even be as simple as improving the curb appeal of your home. By investing and increasing the home value of your properties, you will be able to walk away from the sale with a profit more than you might have expected. 

After you have sold off certain assets and capitalized on their worth, you can put that money towards bigger purchases or the fun things in life. You can add this money into one account or even split it up amongst bills, future purchases and investments. Look into investing this money into a new stock to further increase it’s value to you or simply add it to a savings account for a rainy day fund. The possibilities are endless and if you have the money, it doesn’t hurt to treat yourself every once in a while. 

If you decide to invest your newfound money, ensure you are aware of the risks and rewards associated with investing. Talk with your financial advisor and do some research to make sure these investments are right for you as some may be a better fit than others. If you’re not sure on your own what could potentially be a profitable account to put your money into, calculate your risk/reward ratio on your own by dividing your net profit by the price of your maximum risk. 

There’s a lot of moving parts within your personal finances that can be hard to keep track of. Remember to not be afraid to use your assets whether that may be selling them for some extra cash or cutting back on month to month expenditures and to stay organized while tackling your financial wellness journey. 

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