Financial wellness is defined as the process of learning how to successfully manage financial expenses. It can be applied to an individual or a business but the critical thing to be aware of is that money plays an important part in your life; poor financial wellness can result in poor physical and mental health.

You need to be aware of your current financial status and learn how to improve your financial wellness:

Know Your Finances

You can’t improve your financial wellness unless you understand the importance of money and your current situation.

The first step to improvement involves listing all your assets and liabilities. Again, this is the same process that is used to manage businesses. You need to know what you have coming in and what is going out in order to ensure there is more coming in than you need. This is a key part of financial wellness.

Learn To Plan

We live in a fast-paced digital world where people have become accustomed to getting what they want when they want it. This can lead to poor financial decisions such as purchasing non-essential items on credit.

You need to consider a purchase before you decide if it is really essential and whether you can afford it or not. If it’s not essential your financial wellness can be improved by delaying the purchase and saving the funds. Alternatively, you can choose not to purchase it all.

In modern terms this is much the same as building your social profile online in order to sell products or services but without having created the landing page to accompany it.

Planning doesn’t just involve considering whether you really need something, it also involves looking at what items will be associated with your purchase and in what order they should be bought.

Pay Down Credit

To improve your financial wellness you need to start focusing on reducing or even eliminating your credit. This will reduce the strain on your income and your mental health while improving your financial situation.

Of course reducing credit is not always easy, you’ll need to make cuts to your spending and perhaps even work extra to increase your income. But, the result will be worthwhile.
However, you should ensure that your extra payments are affordable, you still need to live.

Create Your Pot

It’s important to note that you don’t need to be wealthy to be financially well. You simply need to have more income than your outgoings and to create a small pot that will cover emergencies; whether a broken refrigerator or a job loss.

You should start putting any small amount you can away to cover emergencies; ideally, you want to save the equivalent of 3 months income as this will help you to deal with any unforeseen circumstances.

Don’t forget that improving your financial wellness should be an ongoing process, no matter how healthy your finances are there will always be some room for improvement.
Learning how to control your funds will reduce the stress you’re under every day; helping you to enjoy life and maintain your physical and mental health.

Published: 2019-01-09 15:34:32