Do you often have problems with your finances? Do you often get into financial trouble because of debt or bad choices?
It’s time to learn how to make good investments for your money.
Lack of money is a big problem for many people around the world. A common solution they find is to borrow money or enter loans in the bank. These aren’t signs of financial wellness.
Below, we’ll discuss financial wellness is some more and how to get it. We’ve included ways on how to attract and maintain financial wellness. Keep reading to build your knowledge of financial wellness.
Table of Contents
1. What Is Financial Wellness?
Everyone knows about emotional and physical wellness. One is about being fit and having a healthy body. The other is about being in touch with your emotions and being happy.
Sometimes, we focus on these things too much that we forget about one of the factors that affect them: financial wellness. Before we talk about it, let’s define financial wellness first.
Financial wellness refers to your fiscal well-being. When you have financial wellness, you feel comfortable with your financial plans, spending, and savings.
Having financial wellness often results in being well in other aspects as well. Remember how much impact money, or lack thereof, has today.
2. Why You Need to Have Financial Wellness
A 2019 study found that 45% of Americans have $0 in their savings account. This is before the pandemic hit the country. Now, imagine what it’s like to be in debt and have no savings as a pandemic takes over the world.
A popular scenario for many business owners is that they fall further into debt. Because of the dangers brought on by COVID-19, their business needs to close down for a month or two. At that time, they’d have no source of income, but they continue to eat, pay bills, and more.
Try to take the situation from a new graduate’s point of view. You have no job experience yet, and so you haven’t made much in the way of saving money. You’ve only finished school, which means you’re looking at educational debt among other things.
A worldwide crisis then comes around and causes people to lose their jobs and stop hiring. Now, you’re wondering how you’ll pay those loans off. If people more qualified than you can’t secure a position in the industry, how can you?
If you have financial wellness, you can cope with sudden economic changes. If you are fiscally well, means you have ample emergency funds. You may still have debts as well, but they’re payable.
Financial wellness also affects your productivity at work. If you’re not worrying about making enough to pay the bills, you can put 100% into your work. However, if you are preoccupied, it can lower your input quality.
3. What Are the Components of Financial Wellness?
Many financial wellness programs consider a variety of components. Here are the typical ones they often consider:
- Education and coaching
- Financial support
- Long-term planning
- Employee needs
Education and coaching can mean having the knowledge needed for making smart financial decisions. It can be something as simple as knowing your taxes or understanding HSAs. Most companies will offer their employees on-site financial seminars to help employees.
Some companies now give their employees the student loan repayment benefit. Others let their employees take short-term loans. These offers help employees get through tough times and enhance company culture.
In long-term planning, employees can decide how they’ll distribute their assets. They can choose between benefits like retirement plans, estate planning, investing, and others. The final one is about giving employees attention so that you know their needs before you offer help.
4. What You Can Do to Develop Financial Wellness
If you want to change your spending habits and gain financial wellness, learn to be money-wise. Do what you can to spend less than you earn. Reduce expenses by cooking at home, walking to destinations, or riding a bike instead.
You also want to make it a habit to save your money. A good tip is to put 10% or 20% of your monthly income in your savings. Also, treat your money like it’s a seed that you need to grow.
You may also want to protect your assets to avoid unnecessary spending. If your assets are too expensive for a money-wise lifestyle, change them. For example, you may not need a big apartment and you can live in a smaller one with roommates and split the rent.
5. More Financial Wellness Tips
It’s normal for people to feel well when it comes to finances. Most employees feel they’re saving for retirement while they manage their daily resources. However, this can be a problem if you don’t keep track of your spending and saving.
A good piece of advice is to never trust yourself when it comes to money. Act like you’ll have to prove your actions at court and be honest with your money use. Keep track of everything you spend your money on. Keep a closer eye on how much you’re putting in your savings.
Be more mindful of your finances. What is your relationship with money and what emotional connection do you have with it? If you’re thinking of it as a tool that you can use rather than accumulate, you’re on the right path.
It’s also wise to try to understand where your money goes. Later, this can help you get better control over it and how it flows in and out. When we say later, we’re talking about when you make a spending plan.
Speaking of, make a habit of creating a spending plan or budget. This gives you a guide to what items have the most importance. Also, a personal budget can help you gain more control over your spending.
Develop Your Financial Safety Today
That ends our guide on what financial wellness is and how to get it. We hope you learned something valuable from this guide about financial wellness.
But why stop here when there’s so much to discover when it comes to handling finances? If you enjoyed reading, check out our other guides about smart money use.