3 of the Best Financial Decisions You Can Make Right Now

No matter what your financial goals are, it can be tough to tell whether you're making the right decisions to achieve them. In general, there's no one-size-fits-all approach to managing your money, so what's right for one person might not be right for you.

That said, there are a few money moves everyone can benefit from. Regardless of how old you are, how much money you're making, or what your overall financial situation looks like, these are three of the best things you can do right now to improve your financial health.

Man holding hundred-dollar bills.

Image source: Getty Images.

1. Double-check that your retirement savings are on track

Even if you have decades until you reach retirement age, it's never too early to start preparing. In fact, the earlier you start saving, the easier it is to accumulate hundreds of thousands of dollars in your retirement fund. Also, if you find your savings are off track, the sooner you realize the problem, the more time you have to correct it.

One of the simplest ways to check your progress is to run your numbers through a retirement calculator. That will give you an idea of how much you should try to save by retirement age, as well as the amount you should save each month to reach that target. If your results show that you should be saving more per month than you actually are, that signifies you're behind on your savings and need to catch up. On the other hand, if you're already saving the amount the calculator suggests, that means you're right on track.

It's a good idea to check your retirement saving progress every few years and make adjustments as necessary. Sometimes your goals will change too, so it's important to adjust your strategy accordingly. For example, if you realize you might be spending more each year in retirement than you originally planned, that will affect how much you need to save. The earlier you realize your goals have shifted, the easier it will be to adjust your savings.

2. Build a solid emergency fund

An emergency fund is the foundation of a healthy financial life, primarily because it can help you avoid a slew of major money problems.

If you don't have any emergency savings and you're slapped with a hefty unexpected cost, you have a few options to cover it. First, you could rack up credit card debt and potentially pay hundreds of dollars or more in interest payments. Second, you could take out a loan, which could also be costly. Or third, you might choose to take the money from your retirement fund, in which case you could be hit with a penalty as well as income taxes on the amount you withdraw -- not to mention undoing the progress you've made saving for retirement. In other words, not having an emergency fund could lead to a domino effect of consequences.

Although it's essential to have an emergency fund, there's no clear-cut answer as to how much you should save in it. The general rule of thumb is to sock away enough to cover three to six months' worth of expenses, so if you lose your job, you'll be able to tread water for a few months until you find a new one. Some experts, though, say you need more or less than that amount.

Although there isn't necessarily an exact number to aim for, try to save at least a few thousand dollars in your emergency fund. You may not be able to prepare for every single cost that could be thrown your way, but the more you have saved, the better off you'll be.

3. Establish a budget to start saving more

Maintaining a budget might be a chore, but it's one of the best ways to keep your spending in check as well as to find areas where you can save more. The good news is that it's easier than you might think to establish a budget, and there are several apps that can track your spending and make budgeting as simple and painless as possible.

Once you've started tracking your expenses and know where all your money is going, set spending limits across every category in your budget. Most of your fixed expenses -- like your rent, mortgage, or loan repayments -- likely won't shift month to month, so you might not be able to save as much in those areas. But if you try to limit your spending on nonessential costs -- such as dining out, shopping online, and general entertainment expenses -- you may be able to find some extra cash to put toward your savings each month.

With time, sticking to a budget should become a habit, and these financial cutbacks shouldn't feel so painful. When you have a strong grasp on your finances and know exactly what you're spending versus saving each month, you'll learn to make better money decisions every day -- and as a result, you'll be able to improve your overall financial health, too.

Managing your money isn't always easy, and nobody has all the right answers. Although there's no one right way to handle your finances, doing these three things can help you save more and ensure you're setting yourself up for long-term success.

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