The Road to Financial Wellness
Financial wellness is among the six dimensions of wellness. There is a fine line between spending on your “wants” vs your “needs” and it is important to clearly define the difference between the two. You can create rules or guidelines that keep you moving in the right financial direction. Just like road signs on a highway, sometimes you may need to proceed with caution, slow down at times, or stop when your spending habits seem to have gotten out of control. Establishing money rules can help you reach your financial destination.
Below are a few tips to help you get started:
First, examine your spending. For one month, keep track of everything you spend money on to get a sense of where your money is going. This should include things like mortgage/rent, food, clothing, transportation, utilities, car payment, childcare, and credit card payments. If you swipe it, you write it. If you do not want to log your spending habits manually, take advantage of free financial tracker apps available for smartphones. Financial trackers are great tools to enter information quickly and provide a clear picture of spending.
Now, take control of your finances and pay off debt. The debt snowball method is a good way to pay down outstanding debt. This method suggests you pay the minimum payment on higher credit card and loan balances while paying the minimum payment plus an extra payment on your lowest balance. Once you have paid off your lowest balance, you then take the money you used to pay off your lowest balance and apply it to your next lowest balance. You should continue to pay the minimum payment as well until the balances reach zero. Continue this process until you are debt free!
Money is an important aspect of your life, taking charge of your finances can decrease stress and improve your financial and overall well-being.
Photo by Karolina Grabowska from Pexels
