While many people associate health with spa trips, meditation, and yoga classes, health can also relate to our financial lives. Prioritizing financial well-being is a great way to reduce stress while working towards your financial goals.
Let’s take a closer look at what financial wellness is and how to create a financial wellness program.
What is financial well-being?
Financial well-being is a concept that includes taking care of your financial health and well-being. The four signs of financial well-being include being in control of your daily or monthly finances, having enough financial freedom to enjoy life, being on track to achieve your financial goals, and being able to weather financial shock.
Financial well-being can be a great way to reduce stress and anxiety, which can take a toll on both your physical and mental health. Taking steps to improve your financial well-being can also make it easier to achieve your financial, professional, and personal goals.
For example, if you have a large credit card debt with a high interest rate that grows month after month, this can bring a lot of stress into your life. Creating a plan to pay off that debt and moving towards that goal can give you a sense of control and relief.
How to create a financial wellness program
There is never a bad time to prioritize financial wellness, and having a routine that makes it a priority can help you incorporate it into your daily routine. Here are a few steps you can take to create a financial wellness program.
Step 1: Create a budget and review it
The key to creating a budget that will help your financial wellness efforts is to create a budget that will help you live within your means.
When you budget, you can better understand how much money you receive and how much you leave on a weekly or monthly basis. This way you can be sure that you are not overpaying or adding more financial stress to your plate.
If you have debt, you’ll want to budget for the minimum required debt payments (and more if possible) to pay it off faster. If you want to save up for a house, you can add savings goals to your budget so you know to set that money aside each month before making unnecessary purchases like dining out or going to the movies.
The key to making a budget a productive part of your financial wellness routine is not to set it and forget it. Set aside some time on your calendar—for example, every Sunday morning—to sit down and look at your spending for the week. You can ask yourself the following questions to get more information:
- Have you exceeded your spending limits in any categories?
- Where can you cut next week’s expenses to make up for the overspending?
- How much can you afford to spend before the end of the month on each of your main budget categories (food, transportation, personal care, etc.)?
- Did you underspend in any category?
- Can you increase your debt payment or put more money into savings as a result?
These are all important questions you should be asking yourself on a regular basis to make sure you stay on track with your budget.
Step 2: Pause and Think Before You Buy
One small and easy way to improve your financial well-being is to pay attention to why you are making a purchase. This does not apply to essentials such as gasoline, groceries, and toothpaste, but it is important to practice mindfulness before making an unnecessary purchase. Let’s say you’re in a home decor store and you see a beautiful vase. Before leaving, ask yourself the following questions:
- Why do I want to buy this?
- How will this affect my budget?
- What do I feel right now and do these feelings influence my buying decisions?
- Can I wait to buy this?
- Do I really need it?
If possible, stop shopping for a while (this is especially easy to do when shopping online) and give yourself time to reflect on your answers to the questions above. Incorporating this small step into your financial recovery program can help you avoid emotional spending and impulse buying that can bog down your budget and add to your financial stress.
Step 3: Plan Goal Reviews
Many people sit down in the first week of January and set financial goals for themselves, and then when life gets busy, they forget about those goals. That’s why it can be very helpful to add a monthly or quarterly goal reminder to your calendar.
If you don’t currently have financial goals set, spend some time this week thinking about what goals you want to achieve, what steps you need to take to reach them, and when you want to reach that goal.
Then set regular reminders on your calendar to keep track of your progress. This way you can see what can be improved or how to get back on track if you get off course. Checking your goals regularly is the best way to make sure you keep moving towards them.
Step 4: Get Financial Education
Unfortunately, in school we don’t learn much about money and how to manage it. That’s why it’s so important to take the time to get financial education from time to time.
It’s always a good idea to do some research before making a major financial decision (like taking out a loan), but consider adding financial education to your ongoing routine. Pick up a trusted personal finance book and set yourself the goal of reading a chapter each week. Plan to study one new topic (credit scores, how debt works, how to invest, etc.) per quarter. On your way to work, listen to a podcast about money twice a week.
There are many ways to get a financial education (in fact, you are doing it right now), so find one that works for you and is easy to incorporate into your financial wellness program.
bottom line
By incorporating financial well-being into your daily life, you can more easily reduce financial stress, achieve your goals, and take care of your well-being. While an expensive spa day may seem like more fun than creating a budget, cutting expenses, revisiting your financial goals, or getting a financial education, you’ll likely feel a lot less stressed once you take control of your financial life. Then you can go and enjoy this massage without worries.
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