What does it mean to be financially well? For some, it's having a certain amount of money in the bank. For others, it's knowing they can cover their bills without worry. But while it's difficult to pinpoint what it takes to be in a good place financially, in many ways, it's easier to know when you're not there. And according to the 2018 Bank of America Merrill Lynch Workplace Benefits Report, 38% of workers don't consider themselves financially well. In the context of this study, that means that these workers are struggling to manage their current finances while preparing for the future, and feel they don't have the capacity to meet their near- and long-term financial goals.

If you're not content with your financial picture, it's time to change it rather than sit back and accept it. Here are a few things you can do to improve your outlook.

Man holding his head as if stressed while looking at a document


1. Follow a budget

It's hard to feel like you're in your control of your finances when you have no idea where your money is going. So if you're not following a budget already, carve out an hour of time this weekend and create one. To do so, list your recurring monthly expenses, factor in one-time expenses such as annual insurance premiums and subscription renewals that pop up throughout the year, and compare what you spend to what you earn. If you find that you're maxing out your paychecks -- or, worse yet, spending more than what your paychecks allow for -- you'll need to cut corners. Immediately.

2. Build an emergency fund

To feel secure in your ability to manage your near-term expenses, you'll need a safety net for when unexpected bills pop up. And that's where your emergency fund comes in. That fund should, ideally, contain enough money to cover three to six months' worth of living expenses, and its purpose is to provide access to cash when unanticipated expenses arise that your paychecks can't pay for. Having a healthy chunk of money in the bank will help ensure that you're not forced to resort to debt the minute an unplanned bill lands in your lap, so do what it takes to accumulate some cash reserves -- even if it means drastically cutting expenses until you get there.

3. Establish good long-term savings habits

Many workers worry that they won't manage to save enough to enjoy a comfortable retirement. But if you get into the habit of consistently funding an IRA or 401(k), you'll be in a pretty good position to enjoy your golden years. As a general rule, you should aim to set aside 15% or more of each paycheck for the future, but if you can't manage that at present, start slowly and work your way up. Even if you never reach that 15% threshold, saving some amount of money every month will go a long way.

Imagine you're 30 years old and manage to set aside $300 a month for retirement over the next four decades. If your investments generate an average annual 7% return during those 40 years, which is doable with a stock-focused portfolio, you'll be sitting on $719,000 by the time your career comes to a close. Will that make you rich as a senior? Not necessarily. But it could buy you a nice lifestyle if your tastes aren't extravagant.

4. Keep your debt under control

Carrying debt isn't only bad for your finances; it's bad for your mind. For countless Americans, the idea of being saddled with debt is enough to make them feel like failures. Having too much debt can also derail your long-term savings efforts, as those monthly payments could monopolize your income to the point where funding a retirement plan is virtually impossible. The solution? Work on getting out of debt as quickly as you can, and stay away from further debt, especially the credit card variety, which is the worst type to have. You might need to once again cut expenses from your budget to dig yourself out of that hole, or even get a second job to make a dent in your outstanding balance. But doing so will put you in a much better position to start saving and stop worrying.

You don't need to be a financial expert to gain control over your finances; you just need to make smart choices and commit yourself to healthy habits. And once you do, you'll hopefully join the ranks of those Americans who do consider themselves financially well.