How to increase your financial health and make your family proud

By Catherine Alford

All parents want is for their children to be happy, healthy, and independent. It’s every parent's goal for their children to grow up, be contributing members to society, and be happy and confident while they do it.

So, if you really, truly want to make your parents proud, take the steps today to increase your own health and happiness. The best way to do this is to improve your financial health first.

Over the past few years, researchers have made strong correlations between financial health and mental health. According to social worker Amy Morin, a recent study from researchers at the University of South Hampton “found a correlation between mental illness and financial problems,” and that’s just one of many studies that show when your finances are in disarray, it deeply affects your mental health.

So, in order to get your finances and by extension, your outlook on life in order and make your parents proud in the process, here are a few ways to increase your financial health:

1. Drastically Reduce Your Debt

Reducing your debt can improve your financial health in numerous ways. First, from a numbers standpoint, eliminating debt can help to improve the credit utilization portion of your credit score, a part of the “amounts owed” section of your credit score. This section makes up 30% of your score according to My Fico. Essentially, the more “space” you have in your available credit, the more you show lenders that you are a responsible borrower.

Paying off debt also allows you to allocate the money you used for those debt bills for a better purpose. Instead of throwing hundreds of dollars at interest payments, you can instead dip your toes into investing and start putting compound interest on your side or save for a down payment.

Lastly, reducing your debt can help to improve your mental health. According to the National Institute of Health, “high financial debt relative to available assets is associated with higher perceived stress and depression.” Needless to say, reducing your debt is a great way to improve your life, both financially and mentally, something that will make your parents very proud indeed.

2. Increase Your Emergency Savings

A 2015 Bankrate survey showed that only 38% of Americans have an emergency savings that could help them if they encountered a basic $500-$1000 financial problem. Of those who didn’t have money for such expenses, 16% of them said they would borrow the money from family or friends if they needed it.

Parents are always happy to help their kids, but it would definitely wear on me if my kids constantly asked for money. Instead I want them to develop excellent work ethics and financial habits so they can care for themselves if an emergency happened. So, one way to make your parents incredibly proud is to have the emergency funds to support yourself should something happen. That way, when you call them, they’ll know you’re calling just to check in or say hi and not to ask for money for another financial problem.

3. Pursue Home Ownership

According to recent research from the Pew Research Center, more millennials live with their parents now than five years ago, even though the economic climate has improved. Additionally, the research shows there has been no improvement in the number of millennials who have their own households since the recession in 2007.

Again, as a parent myself, I’d happily open to my home to my children if they needed a helping hand during a particularly difficult period in their lives or if they needed to save money for debt repayment or saving for a home. However, the goal should eventually be to become self-sustaining and independent.

It’s a challenging process to pursue home ownership. You need excellent credit, a steady income, and a sizeable down payment. However, if you can accomplish these tasks on your own, it will greatly improve your financial health and enable you to be one of the few to pursue the American dream of homeownership. This, in turn, can improve your mental outlook on life.

Ultimately, your parents will love you and be proud of you no matter what. However, if you increase your financial health by paying off debt, saving for an emergency, and pursuing home ownership, you will show them that you’re a true adult, someone who takes their financial health seriously and who can support themselves. This would make any parent extremely proud and feel confident knowing that their children can take care of themselves should something ever happen to them.

About the Author

Catherine Alford is a personal finance writer, whose work has appeared in U.S. News and World Report and Business Insider, among others.

Written on May 24, 2016

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