1. Establish your starting point – It’s hard to know where you’re going without knowing where you’re starting from. Give yourself a financial audit to get a sense of your spending habits. This includes things like credit card and student loan debt, monthly living expenses, savings accounts, and more. Understanding your financial habits is key. You might learn a little more about yourself in this process. Try asking yourself these questions:
- What’s important to you?
- What’s not important?
- Where have you been investing your money?
- What does that tell you about your financial priorities?
- Where do you see areas of opportunity?
2. Create a spending plan – A budget goes a long way in the journey to attain financial wellness. By creating a spending plan, you’re helping yourself make good choices on where your money goes.
3. Manage your debt – We’re living in a time where consumer debt has hit record highs. Between student loan debt and housing alone, it can feel unmanageable. Reducing and/or eliminating debt (such as from credit cards) as soon as possible is key to financial stability.
4. Design an emergency plan – Life is unexpected. COVID-19 taught us that life can change in an instant. It’s important to have a nest egg of emergency funds to tap into for those unforeseen circumstances. Financial experts recommend individuals have three months’ worth of living expenses saved. For families, they recommend six months of living expenses saved as part of an emergency fund.
5. Save for the future – As a general rule of thumb, it’s recommended to dedicate 10-15% of your gross income to retirement funds. The exact amount depends on the person, but the sooner you can start saving, the better. It’s important to factor in your long-term goals even if they feel too far in the future to think about.
6. Tap into available resources and tools – If your employer offers financial wellness programs, take advantage of them. Ask your HR team if there are financial wellness programs you can learn about. You might consider working with a financial advisor to ensure you’re maximizing your investments.
7. Give back – This might seem like a counterintuitive piece of financial wellness. Research shows that giving back does have its own set of mental health benefits. If you can, give to causes you care about.
With the right tools and resources, you can make smart financial decisions for your financial well-being.
Source: https://www.betterup.com/blog/financial-wellness
Madeline Miles is a writer, communicator, and storyteller who is passionate about using words to help drive positive change. She holds a bachelor’s in English Creative Writing and Communication Studies and lives in Denver, Colorado. In her spare time, she’s usually somewhere outside (preferably in the mountains) — and enjoys poetry and fiction.