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How to Practice Financial Wellness

by Elissa Solomon
6 minutes read

Financial wellness means that you have the confidence and knowledge to make the most of your money. This means daily, monthly, and unplanned occasions. 

That is easier said than done for most people though. It can be tough to become financially secure, however, it’s not impossible when you know what you are doing. 

Let’s have a look at how you can practice financial wellness and become more in control of your finances in the future: 

Budgeting

 The first thing you need to do is plan your spending if you want to get better financial health. A budget should be your first step towards this. It can help to give you control and choose where and when you need to spend your money. You should include things like rent, mortgage, transport, utilities, essentials, and other things that you enjoy. See if you can find a budget planner to help get you started. 

You should aim to look at your budget each month and have a big look at it quarterly so you can check that it suits your goals. You might need to look at it sooner if things change such as getting a new job with a different income. 

Tracking Your Spending 

It is quite simple to create a budget, however, sticking to one can be harder. You need to make sure you monitor your spending if you want your budget to be successful. Some apps can help, but simply looking at your bank account at the end of the month can work just as well. When you are mindful of how and where you spend your money you will remain in control and you will be able to see where you can make some cutbacks. 

Make Sure You Spend Carefully 

It doesn’t matter if you have a big budget or a small one, you need to ensure you are not overspending. It can be a hard habit to get into, however, once you are able ot stick to it and spend carefully you will be able to understand your limits and use your money wisely. This will also stop you from feeling guilty. If you include a budget for clothes, self-care, and going out you will make it easier to stick to your budget. Rather than regretting what you are spending, control it and add an allowance for it. 

Don’t Borrow For Essentials 

It’s not always a bad thing to borrow money, but it should only ever be for the right reasons. When you do it properly, a small amount of debt can help to improve your finances. For example, when you come to buy a house and get a mortgage, you are investing in your future. The house could increase in value and you will have something to leave to those you care about. You just need to make sure you can afford the repayments. 

On the other hand, you should never borrow more than you can afford, and you should never borrow money to pay for essentials. This means you need to ensure your budget can pay for things like food, bills, and your mortgage. If you do this can lead to issues in the future. If you feel like you need to borrow for things like this, it can lead to you using high-percentage loans that just lead to trouble and hinder your financial wellness. 

Save 

Once you have budgeting and spending under control you can start to look at starting your savings. You’re not going to be in any good financial state until you get yourself set up with some savings. Even if it is just a little and often, you need to make sure you put some money away each month. The first pot you need to build up is your emergency pot, this is for any unexpected costs that may happen. Although it may take some time, you should ideally have at least 3 months’ worth of wages in your emergency pot so you can stay afloat if you were to lose your job. 

Once you have some money going into your emergency pot each month, you can start looking at other saving pots. For example, you may set up a Christmas fund, house deposit fund, investment fund, and holiday fund. Each time you get paid split your savings into each pot this way it will become a habit and you won’t have the temptation of spending the money. 

Always Research The Best Deals 

One of the best things you can do is to research each purchase you make before you commit to it. If you do this you can hunt down all the best prices. You may even be surprised by how much you can save when you do shop around rather than going with the first price you find. Of course, you don’t want to be second-guessing every single purchase that you do make but you should do your research on large items. This includes things like buying a car, mortgage prices, insurance prices, credit cards, etc. Try using some comparison sites to start with. You need to make sure you are looking at both the quality and price. The idea isn’t to drop on quality it is to get the best deal on the service or product that you want. 

Consider Making Investments 

Once you have yourself practiced following your budget and have some savings set up, you may want to consider making some investments. Of course, investments do come with some risk and there is a chance that you can lose money, however, many people are now investing for their future in a variety of ways. For example, some people invest in a second pension others choose to invest in stocks with dividend payments. It’s always best to talk these decisions through with a financial advisor and never do it before you have savings. 

It may seem complicated to practice financial wellness, however, following these tips should help you to get into control and turn looking after your finances into a healthy habit. 

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