When you think about your health and wellbeing, financial health is probably not front of mind. Your top focus will tend to be on physical and mental wellbeing, right? However, when your financial health is out of balance it it can impact on how you feel mentally while spoiling over to affect your physical health.
First, financial wellbeing is not about how rich you are or how much you have in the bank. It is about your ability to manage your everyday expenses against your available income while ensuring you have savings for emergencies. It is the extent to which you can comfortably meet your financial commitments and maintain financial resilience for the future.
In a recent AMP report, almost 2.5 million Australians felt moderately to severely financially stressed and this was not limited to particular income groups either. Compared to two years ago people admitted they were engaging in negative financial behaviours like paying bulls later resulting in not being able to contribute to their savings.
However, managing your finances can be challenging leading you further down the road of stress rather than financial freedom. But all is not lost and it is never too late to turn things around and get to a place where you are comfortable and secure financially. An audit of your financial committments is the start to understanding your financial health.
How to assess your financial health?
💛. What is your relationship to money? Recognising your behaviours, attitudes and patterns about finance will help understand your resilience and sense of security about what financial freedom means to you.
💛. What is your current financial status? Knowing where you are so you can measure progress towards your future goals.
💛. Create a budget that works for you. Identify your essential costs first – the not negotiable, like bills, then compare this against your income to work out what you have left.
💛. Set yourself a financial goal. From the amount you have left after essential costs, how much can you comfortably put aside as savings each week, fortnight or month?
💛. Hold yourself accountable to your spending habits.
💛. Build up a rainy day fund (typically three months of your wage).
💛. Be open to talk about money or even set up an appointment with a financial adviser to review your finance commitments. Are there any items that don’t add value to your goals?
Daily tips to start a savings goal
🧡. Swap takeaway coffee for a homemade cup and ave up to $5 a day
🧡. Reduce subscription services you don’t use or value (e.g. do you really need all those magazines or Netflix?0
🧡. Bulk buy shopping weekly instead of daily and make a shopping list so you only buy what you actually need.
🧡. Take your lunch to work.
🧡. Reduce alcoholic drinks.
🧡. Refocus your money mindset – what is your relationship to money? Use money to buy things you enjoy and align with your values and purpose in life
🧡. Spend mindfully – not mindlessly – before you make a purchase ask yourself `do I really need it or do I just want it?’
When you can assess the meaning and value of money, you can increase your ability to have more financial freedom and enjoy life.