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How to improve your financial wellbeing

Your financial wellness is about more than just how much money you make. You don’t have to be a millionaire to be financially healthy, but it does take preparation and practice. Let’s unpack what your financial wellbeing entails and the ways you can improve it.

Financial success doesn’t always equal financial security. What you do with your money, how you manage it on a daily basis, and the decisions you make with it are what’s important when it comes to your financial wellbeing.

Determining your financial wellness

Financial wellness means you’re in control of your money and your money (or lack thereof) doesn’t control you. It entails having the security to pay your bills, the ability to plan for unexpected costs and making sound financial decisions so that you have the freedom to manage your money however you wish.

Ask yourself:

  • Do you have a budget that helps you control your day-to-day and monthly spending?
  • Do you have money set aside for an emergency?  
  • Do you have short- and long-term financial goals, and are you actively pursuing them?
  • Can you finance your spend without using a credit card?
  • What is your attitude towards money: optimism and abundance or scarcity and negativity?

Once you’ve answered these questions, you’ll have a better idea of the state of your financial health and what you can do to get it in shape.

Getting on the path to financial wellness

Take a look at the bigger picture; here’s how:

1. Take stock of your finances

Know where you stand financially and determine what adjustments need to be made. Assess how much you earn and spend, how much money goes towards paying debt, where you are falling short and what you can cut down on to free up cash flow.

2. Create a budget and stick to it

Approach budgeting as a tool to prioritise spending and help you determine where your money is going instead of wondering where it disappeared to. Creating a budget helps you develop smart money habits that put you in control of your money and empower your financial goals.

3. Decrease your debt

If most of your budget goes towards debt, meeting your financial goals can be difficult. As it also affects your credit score, consider a debt management solution to help deal with it. What you’re spending on interest could be better used towards savings or covering other expenses.

4. Plan ahead

Create an emergency fund by setting money aside that you can access if an unplanned expense or financial situation occurs. You also need to start preparing for retirement so that you’ll have a nest egg to fund your golden years when you aren’t earning an income anymore.

5. Protect what’s important

Get the right cover for you, your family and your assets so that if something unexpected happens, you don’t have to bear the financial impact. An insurance payout could reduce your expenses in the long run and help you maintain your and your family’s financial security.