Do you need financial wellness tips? It’s a question that many people ask themselves, but may not know how to answer.
I know many people really do struggle with gaining a sense of well-being about their finances. If you’re feeling like your finances are overwhelming, it’s okay! There are many people out there in the same situation who feel lost and unsure about where to start.
The key to achieving financial wellness is finding a balance between your personal finances and your overall happiness. What good financial tips will help you in this quest for balance?
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Why is financial wellness important?
Financial wellness is important for everyone because it can help lower your stress levels. According to a survey by Capital One and the Decision Lab, 77% of Americans say they feel anxious about their financial situation.
And you can bet it’s a similar story in the UK, Canada, Australia and many other countries.
Stress about money not only affects the brain, it has also been proven to have a negative effect on relationships and one’s social life.
How do you achieve financial wellness?
To achieve financial wellness you are going to need:
- A reliable income
- Fully funded emergency fund
- Debt free or a well laid out plan to achieve it (including student loans)
- Retirement savings sorted
- Savings plan created
Have the above ticked off and you are well on your way to achieve financial wellness.
What are some examples of financial wellness?
Being able to comfortably afford and pay all the bills that land in your inbox and on your doorstep is one example of financial wellness.
Feeling that you are living comfortably within your means, knowing that you have money in your savings account. And could splash out a little more if you wanted to and still not have any debt is another.
Financial wellness month
January is America’s National Financial Wellness Month. The UK is sadly lacking in recognizing the need for a wellness month, whether that’s for employees, students or individuals.
It’s mainly aimed at employers and encouraging them to provide wellness programs and financial wellness tips for employees to help them reduce stress and keep on being productive.
Financial wellness month tips aren’t just for January though. You can get started with the tips below in January but don’t limit them to just a month. These are for today, tomorrow and next year.
What are some good financial tips?
Live below your means always is one of the best tips for financial success I can offer you. Even on a low income there are things you can do to make this happen. Live in a cheaper area, have a smaller house, share an apartment. Housing is often your biggest bill so make it smaller.
Don’t fall into the trap of lifestyle inflation. This is where your lifestyle increases with your salary. Keep life simple, keep your bills low, check your credit report regularly and keep your credit score high. Have at least one savings goal focused on the future you. All sound financial tips.
9 financial wellness tips to achieve peace with your money
The following financial well being tips will help you make changes to how you manage your finances and the financial decisions you make.
1. create a financial plan
The first of my tips for financial wellness is developing a spending plan. Start by writing down your financial goals and figuring out what you want to achieve in the future.
Think about your financial wellness goals for the short, medium and longer term. What do you want to have achieved in 3 months, 1 year? Where do you want to be in 5 years time?
This is so important because it will help you figure out how much money you need now that aligns with your aspirations for the future.
You can also use this as an opportunity to work through and move on from any financial regrets or mistakes from the past.
9 Short Term Financial Goals To Set For Success
6 Medium Term Financial Goals You Should Have
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2. create a budget
Next, you should create a budget. A lot of people think about budgets as restrictive or difficult to maintain, but that’s not the case at all!
Budgets help you stay in control and make good decisions. Your budget is your plan for your money. Make a good budget and you’ve made a good financial decision. One that you can build on with further decisions about your money.
How To Budget Your Money When You Don’t Know How
10 Powerfully Smart Budgeting Tips For Beginners
3. build your emergency fund
Another key financial wellness tip is to start building your emergency fund. This is important because when something happens that you don’t expect, like a car repair or sudden medical expense, you’ll be prepared to cover it.
An emergency fund can also help with situations where things are starting to pile up – for example if you get laid off from work and start missing payments on bills.
Ideally you want 3-6 months of expenses in your emergency fund. If you don’t have one yet then aim for saving up $1000 as quickly as possible.
Once you have saved $1000 continue to save until you have your goal of 3-6 months of expenses.
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4. pay off your debts and avoid future debt
To achieve financial well-being you need to start tackling your debt. Aggressive paying off of debts is the best way to stay out of debt and achieve financial wellness.
The first thing you should do is add up all your debts so you know exactly how much you owe.
Pay off the high-interest debts first. This includes credit cards, store and installment loans. You will be able to save money on interest by paying them off sooner rather than later – before they get out of hand!
Then focus on clearning cheaper debt like your student loans, overdraft fees and other loans.
Once you’ve paid down your debt, use the money you save each month to build up your emergency fund faster in case something unexpected happens and you need a cushion for it financially.
Lastly make sure that you’re not taking on any more debt because this can lead to financial stress, which is never good when trying to achieve financial wellness.
5. spend less than you earn
The key to finding financial peace is always spend less than you earn, no matter what you earn. You might be living above your means right now, so living below your means will take a little getting used to.
So how can you start living on less than what you earn every year?
First of all, take a few hours to reflect on your current spending habits and see if there are any areas that could be cut back.
For example: do you have an expensive cell phone plan when the service is similar for cheaper plans? Could you lower your cable bill to a cheaper alternative?
Can you swap out some premium brands for generic brands in your grocery shop? This tip alone can save your hundreds every year.
Another way you can spend less than what you earn is by taking advantage of budgeting apps. These tools will help keep your spending in check, identify any budgeting issues and make sure that every dollar goes towards something worthwhile instead of wastefully going out the window.
6. increase your financial knowledge
The more you know, the more in control you are. When it comes to your personal finances, the more you know about it, the better off your financial wellness will be.
You want to know and understand things like retirement savings, your credit score, reading a credit report, which credit card is right for you. And which is most definitely not!
There are so many experts out there who can help by providing advice on how to manage money and understand finances – like blogs or podcasts that offer free education in this topic.
Your library is a great place to start for books that can teach you more about financial wellness and have good financial tips to learn.
The Best Personal Finance Books
These are best personal finance books I recommend to anyone who wants to grow their knowledge and take control of their money. Try and buy a used copy - it's good money sense!
Clever Girl Finance: Ditch debt, save money and build real wealth
The perfect book for beginners focused on women. Women tend to earn less and live longer. We need to know how to manage our own money.
The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness
The 7 baby steps to a total makeover of your money and your ability to manage it. Get out of debt and build your savings.
Broke Millennial: Stop Scraping By and Get Your Financial Life Together (Broke Millennial Series)
Written by a millennial for the millennial. A beginners guide with a strong emphasis on the mental aspect of managing your finances.
Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence
This book changed my relationship with money forever. Focused on achieving financial independence (work becomes optional).
7. earn more money
You can of course gain financial wellness on a low income, but earning more will help you to not just avoid financial stress but also achieve your goals.
The good news is that there are plenty of ways to earn more money, and all it takes is a little bit of creativity in order to find something that will work for you.
Some opportunities might include: picking up an extra shift at your current job, taking on a side gig, starting a business on the side.
No matter which way you choose to go about it, earning more money will help to provide financial peace and well-being as long as you don’t spend the extra income!
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8. talk about money with family
For some reason many of us dislike talking about money. We’ll talk about anything and everything instead. But one of the most important financial well being tips I can give you is to discuss your finances with your spouse and family.
Don’t keep secrets.
Don’t be embarrassed.
Talk about it and make sure that everyone involved with your money understands how finances work and what the goal is to achieve financial wellness.
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9. prioritize your finances
Many people will do anything rather than sit down and budget. They are missing the point that your finances are your key to feeling free.
Prioritizing your finances doesn’t mean slaving over spreadsheets and budgets every night, it simply means you take the time to plan out and organize what’s going on with your money.
The key to prioritizing your finances is making sure that you are putting it at the top of your list. That way, you can make sure that your financial goals stay on track so they don’t get lost in any other areas of life like a job or kids.
After all, if you don’t take a little time to prioritize your finances and focus on them instead of giving everything else priority, then how do you expect to achieve financial wellness and financial freedom?
You can do this by making an appointment with yourself and putting it in your calendar. Once you’ve done that, make sure you stick to the plan!
Financial wellness tips working for you
I hope these financial wellness tips will help you on your journey to build a healthy relationship with money. You deserve to feel in charge and confident about where your money is going, so that it’s not the other way around.
The most important thing is to take the first step and start taking control of your finances. When you are in charge of your own money, it empowers you with a sense of self-worth that will carry over into every other aspect of life.
Remember, no matter how much or little wealth you currently possess, practicing financial wellness will help you live a life of more freedom and peace.
Start taking back control of your money by grabbing your copy of the Money Saving Starter Guide today.
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Last Updated on 10th November 2021 by Emma