Financial wellness is about your health and wealth. It’s about the overall quality of the life you’re living. These financial wellness tips will help you focus on top-level goals for life and money success.
It’s important to set personal and financial goals when it comes to financial wellbeing. The more prepared you are to financially meet life’s challenges the less stress you’ll feel. And living with less financial stress is my definition of success that supports a healthier, happier and purpose-driven person.
1. Have a vision
Take time to articulate a vision for life through a vision statement so your journey has a direction. A vision statement includes your hopes and dreams and your thoughts and feelings about the ideal lifestyle.
Start with the vision statement and create the goals that support the vision. Then, associate the financial aspects of those goals followed by an action plan. Start with the reason (the why) before setting goals, plans, and tactics.
2. Focus on your health
Health is wealth. Financial stress impacts our health and can lead to exhaustion, depression, and anxiety. No amount of money will make you feel healthy if you’re physically and mentally ill. Do not deprioritize your health and wellbeing when you’re working on financial goals. You want to be able to fully enjoy the future you create.
Make sure to eat properly, get plenty of rest, exercise, and allow for downtime and play. Set annual and quarterly health screenings and budget accordingly for them.
3. Recognize what’s important in life
Money is a tool. It can be used to help you achieve some really amazing things. But money isn’t the goal in life. The goal is to live your dream lifestyle however you envision that life. We often confuse what’s important in our lives by comparing ourselves to what others deem important. It’s the dreaded keeping up with the Joneses.
As a goal, stop letting others influence your thinking and spending habits and stop getting into debt to impress people who don’t matter. Achieving financial independence is best experienced when you can spend your time on what matters to you–family, friends or projects.
4. Grow your network
There’s a saying that your network is your net worth. Take time to grow your network. This will expand your support system, expose you to new thinking and ways of doing things, and will open new opportunities. Allocate time to develop your network of people who challenge you to become better.
Within your company, consider joining interdepartmental projects and volunteer in company-wide events. Not only will this grow your connections, but it’ll also give you valuable experience to share when asking for a pay raise. Outside of work, think about groups that interest you. Check meetup.com for entrepreneurial meetups, outdoor activities, and theme focused group discussions.
5. Learn a new skill
Learning a new skill can have a tremendous impact on your career and financial life. If you’re stuck in a dead-end job and can’t get ahead, going back to school part-time or taking a course can provide the skills you need to qualify for a promotion and enjoy real career satisfaction. Learning a new skill can also serve as a backup plan if you feel your position is slowly becoming obsolete. It can open the door to a new field and better opportunities.
Gain new skills online through sites like Skillshare or the college-backed website Edx.org. At work, ask your manager or HR associate about workplace training sessions and certifications. Check your employee benefits for tuition reimbursement programs that can pay for classes at your local university.
6. Pay Yourself First
Make your future self a priority and always pay yourself first. This simply means every payday you allocate a percentage of your income towards your savings goals. Start with a $500 rainy day fund for unexpected expenses. Also, stack on your emergency fund to cover periods of underemployment or unemployment. You’ll want at least 6 months to cover your basic living expenses.
Pay yourself first by setting a split deposit directly with your payroll department or set up auto-transfers when your paycheck hits your checking account.
7. Make Money with Money
To achieve financial security, you’ll want to start making money with money. Start allocating some of your paychecks to activities that generate income. For instance, saving money into an account that earns interest allows your money to earn money. And with compound interest, you’ll start earning interest on the interest you’ve earned. That’s how your money grows. Earn more with your savings using high-yield online savings accounts.
Investing is another way for your money to grow with a longer-term horizon. Investing helps your money grow when the value of the stock appreciates over time. You also benefit through compound growth when dividends (profit sharing to stockholders) are reinvested in buying more of the stock.
8. Manage Debt and Control Credit
Debt is a ball and chain that traps you into working more hours to pay for items you’ve purchased in the past that may not have any present-day value. Managing debt means reducing the cost of borrowing through refinancing and consolidation along with eliminating debt to positively impact your net worth.
Credit is a tool and when used wisely can help you leverage other people’s money to achieve your life goals. However, mindlessly using credit can lead to long-term debt and the financial stress that comes with any financial obligation. Learn how credit works, improve your score, and track your spending to keep you from relying on credit.
9. Protect your income, assets, and loved ones
Live financially well by protecting yourself from unexpected events. As mentioned earlier, start with the rainy day and an emergency fund. Review your insurance coverage. That includes your health insurance, disability benefits, and group life insurance offered by your employer. And consider the following:
- First, think about term life insurance to protect your loved ones.
- Second, determine how to protect your stuff. Are there supplemental insurance plans you can have? Do you need renters insurance? Can you get a better auto insurance policy?
- Third, add or update your beneficiaries in your banking accounts, insurance policies, investments and brokerage accounts.
- Finally, gain peace of mind by having a healthcare directive, POA and a will that outlines your wishes in the event you become disabled, seriously hospitalized or upon death.
10. Invest in your retirement
Retirement will happen whether it’s by choice, circumstance or age. The federal government sets an age which became the generally accepted time people leave the workforce. But basically retirement age just means you’re eligible for federal benefits. Investing for retirement will help you retire well. Start investing for your retirement as soon as you start earning income. You’ll benefit from a longer time horizon than waiting until you’re 50 years old.
Contribute to your employer’s 401(k) or retirement plan first. Even though you cannot max out contributions yet, any contribution is better than none. Then, begin contributing the max allowed for Roth IRAs. After that, you may want to consider investing through brokerage accounts to grow additional assets.
Each new day, week, month or year is a fresh start to become a better less financially stressed version of yourself. A big part of living financially well is using the right products and services so check out the financial marketplace for banking, investing, budgeting, and tools to help you on your financial wellness journey.