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What is Financial Wellness
Financial wellness, in general, refers to an individual’s money-related well-being and their ability to effectively manage their finances. Financial wellness means working toward a financial goal (retirement, kid’s college fund), being in control of day-to-day finances, and being able to make decisions that allow you to enjoy your life.
So, why is it important? Practicing financial wellness can lead to better overall well-being. Financial stress can cause both physical and mental health issues like depression, anxiety, sleep loss, migraines, high blood pressure, heart arrhythmia, and more. Managing your money and having a solid financial foundation can help ward off these issues.
How to Practice
Starting with small, monthly changes is a great place to begin your financial wellness journey. Getting your money together before you take any big steps can help lead you to your goal. Try a few of these tips to get started:
Follow the 30-day rule. If you see something pricey that you want, hold off on buying it right away. If you are still thinking about it after 30 days, then go ahead and purchase it.
Take notice of how you spend your money. Familiarizing yourself with how your money goes in and out of your account can help identify where changes need to be made. Where are you spending your money? Where is it coming from? Knowing these components can give you a better sense of your financial standing.
Prioritize your goals. Figure out which high-interest debts you may need to pay off first. Maybe you need to start on your emergency fund or savings for future plans. It’s important to figure out your high priority goals so you can move forward.
Create a monthly budget and stick to it. Make a budget once you've figured out how you're spending your money and what goals you want to accomplish. This step is highly personalized, so find out what works for you. A popular rule of thumb that could help you get started is the 50/30/20 rule: 50% toward need, 30% toward want, and 20% toward savings.
Save money where you can. Saving small amounts of money every month may not feel like anything groundbreaking, but eventually, you will see the benefit. Learn how to cancel subscriptions on iPhones and Androids that you may have forgotten you’re paying for. Save monthly housing costs by living more sustainably and investing in long-term appliances. Check out this list of low-cost or free activities to do on weekends.
Set up an automatic transfer from checking to saving. Start with 10% (or whatever number you’re comfortable with) of every paycheck and move from there.
Join a financial wellness program. Check to see if your employer offers a financial wellness program within your company. These programs can be a great way to get help budgeting and reduce money-related stress.
Taking these steps can lead you to make more confident financial changes like investing your money, but you first need to take small steps to obtain financial wellness.
Wellzesta’s commitment to the eight dimensions of wellness highlights financial wellness to users. With wellness articles and videos providing financial tips and advice, users can focus on their financial well-being.