Ensuring your finances are as healthy as your body and mind is a powerful way to improve your quality of life. Don’t believe us? Read on to find out all about financial wellness
If you’re facing into the new year with a list of debt and no real way idea of what you can do about it, then it’s time to take a look at your financial wellness. We’re well aware of mental health and physical health but have you ever looked at your financial health?
What is financial wellness?
Financial unwellness has long lasting effects and can often creep up on you so it is wonderful that organisations and individuals alike are now taking steps to address their own financial wellbeing concerns!
But what does financial wellness actually mean? Well, really, it is to take steps to ensure that financial stress doesn’t creep into your life. Financial stress arrives in a person’s life when something unexpected happens. A financial surprise if you like. The ideal situation is to make sure you’re ready for all future financial likelihoods. The idea is to simply chart your own financial worlds and then plan to have the correct amount of money in place to pay for that event when the time comes.
But everyone is very different. What is important to one person is irrelevant to another. Financial wellness teaches individuals to firstly identify their own life events, then shows individuals how to work towards them in the most efficient way possible. All going well, the event arrives, allocated money is spent, and life carries on as normal.
But where does financial wellness sit in the ever changing wellness culture that we now live in?
Its often very common for us to wake up in the morning and feel like taking exercise. Frequently we arrive at lunch knowing that a nice healthy lunch is exactly what your body craves. But we rarely jump out of bed and think “I must sort out my finances – now!”
Money as a pillar
Bear in mind that we now know that there are four key pillars of wellness. Namely mind, money, fit and food.
If you take a cross section of 1,000 individuals, really what we have to accept is that there are a variety of reasons why individuals amongst that mix of people will feel stress. One may have a weight concern, another a health concern, another a debt issue and another may simply want to be more productive to reduce their work load. Indeed, some may have two or three concerns all at once that are playing heavily on their minds.
Financial wellness is something that affects the vast majority of those 1,000 people. Most people want to understand how to manage their money more effectively. Most would like to have a little more structure on their spending. Others would like to know how best to save. While others would like to understand a bit more about overpaying their mortgage.
Financial wellness is the one element of wellness that has far reaching positive consequences. A small change now to your financial set up can be the reason you’re able to retire five years early, have money to get the kids through college, or have the correct insurance set up should an unexpected event happen. The financial planning knowledge is the key and the understanding of what your goals are crucial to gaining a strong understanding of how to be financially well. And the good news is that very little effort is required to make this all tick!
So what can you do?
Track and budget
In a nutshell you need to spend less and save more, but how can you do that when you don’t really understand where your money is going every month. So, for the next 30 days track everything you need. And we mean everything, even that sneaky second coffee. At the end of the 30 days reassess your spending and look at areas you can cut back from or better budget for.
Invest in the future
Convinced you can’t afford a pension? Ok, but can you afford to have no extra income once you hit 70? Speak to your employer, do they have a scheme in place? Or speak to a financial advisor who’ll help you plan. Taking precautions now will only help in the future.
Do your homework
Are you really getting the best deal on car insurance, phone networks and TV packages? By looking around and switching, it’s possible to save a significant amount each month. Which will soon add up.
Nick Lawlor is MD @ Employee Financial Wellness. For more information visit employeefinancialwellness.ie