A wise man holds his finance plans in mind rather than hand – to establish a successful relationship with moneyFizza Junaid
Your financial wellness is unique for you. We usually calculate our financial stability through how much money we have and how well we are doing financially. Reality is different, your financial well-being is identified through the factors that explain your relationship with money. For instance, how secure do you feel about your financial future, and how well you are staying on top of your financial obligations? Moreover, whether you are able to make financial choices freely to enjoy life or not.
The story about your finances does not need to be a scary one. We have pulled together 10 tips for successful relationship with money to improve your overall financial wellness. Here you’ll find a way to get a more realistic picture of where and how you can manage your money to become financially well. But first, let’s understand the concept of financial wellness.
Table of Contents
What is Financial Wellness?
Financial health is all about having a good relationship with money. It includes your plans to deal with variables that can affect your financial stability. Financial stability is directly linked and affected by how stable your relationship is with money.
1. Improve your Financial Situation by Living on Less
The best financial tip you can use is to live on less. It means establishing your essentials in place, specifically core utilities, housing, food, transportation, and medicines. The method also includes cutting down your non-essential spending until your financial situation gets back to normal. Living below your means can surely help in saving money for more important tasks. Hence, it’s completely fine to downsize your car, house, etc. until financial stability.
2. Create Multiple Income Sources
One of the savviest financial health tips is to create multiple income sources. Because having more than one income source means getting a more stable financial situation. So, do not have just a single source of income and find multiple creative ways to earn more money. For instance, you can utilize your skills as a freelancer or set up a low-cost side hustle. You can challenge yourself to find more creative ways out of your intellect.
3. Use the Right Budgeting Method That Works for You
Every budget plan does not work for everyone. Therefore, you need to find your budgeting plan that works best for you. There are numerous method options to pick from. For instance, the budget method of 80/20 is a percentage breakout method that is quite simple to follow. This means you can save 20 % while using the 80% of your finances over your needs. Make sure to choose a method that is easy to follow for a longer period.
4. Keep Learning About Personal Finance
A person should never stop learning specifically when it’s about personal financing. You can keep learning new trends and ways through the internet as nowadays it’s easy to keep improving your financial progress. You can get help with investing, budgeting, and everything that comes in between. Find different ideas from podcasts, online finance courses, videos, books, etc. to get started.
5. Keep Tracking Your Spending
One of the simplest but most effective ways to improve your financial wellness is to keep tracking your spending. This simple trick can have a very powerful impact on financial health. For instance, tracking your spending prevents your budget from busting out, and helps in finding the points where you can cut back in time of need. You can use a mobile app for this purpose or can maintain it through a journal.
6. Save Emergency Funds Before Investing
The most crucial thing to keep in place is your emergency fund strategy. The money you save for emergencies can keep you away from debt under tough circumstances.
It can help to put food on the table and provide emergency aid to pay bills. It’s perfect to save for emergency funds before you start investing. In times of uncertainty the more you have savings the more you will be stable. You can start investing once you get your savings in a comfortable place.
7. Make Sure to Become Debt-Free
One of the biggest barriers between you and your financial wellness can be your debt. When you have no debt to pay at that time you’ll be more stable and less stressed. This way you can save more money rather than getting stuck under never ending interest. Start by picking up the right budget plan that includes the right debt reduction strategies for you. For instance, you can get help from 5 Strategies to Pay off Debt Faster.
8. Regularly Perform a Financial Health Check
How can you check whether your financial wellness is improving or not? Simply perform a financial health check on a regular basis like you visit your doctor for a regular physical health check. A financial stability check is similar to your physical health checkup methods – you need consistent checks to ensure you are on the right track. This way you can find how aligned you are with your goals and how your budget and savings are going.
Physical wellness is crucial to get aligned with every other dimension of wellness including financial wellness. Because when you feel physically active you can find multiple ways to improve your financial status and can work on it. So, make sure to focus on it by using these 10 effective ways to boost your physical wellness. These are the small changes that you can easily incorporate into life for bigger results.
9. Plan a Saving Method for Your Retirement
It is way better to start saving for your retirement life as early as possible. One of the key aspects of financial wellness is to start retirement planning from a young age. For instance, you can use a retirement calculator to make a strategy and start saving a small amount for your retirement life accordingly, or you can invest to get longer financial stability.
10. Ask for Help if You Need It
It’s hard to ask someone for help even when we need it. However, sometimes it’s necessary to keep your financial wellness going. So, in case you are at the stage where you need financial assistance – ask your service providers and lenders for financial help. Numerous lenders and service providers offer programs to individuals facing financial instability. But make sure to understand all the options and their costs, benefits, etc. before proceeding towards agreement.
Frequently Asked Questions
What are the 5 Financial wellness pillars?
You can practice financial wellness after understanding its five pillars:
Budgeting your finances
Making savings from income
Investing with long term planning
Taking risks after analyzing every aspect
Working on debt management
How can I start financial planning?
Before starting to work on your financial health make up your mind it is going to be a long term process. At first, set smart and easy to follow goals for yourself. You can track your money and reduce your expenses while creating an emergency fund box. After balancing your routine finances, you can move towards investment and larger goals.