Financial wellbeing is essentially your financial security, having enough money to meet not only your daily needs but to be able to make decisions without worrying about the financial repercussions at all times. Ensuring your financial wellbeing is important not only for your finances and ease of day-to-day life but because of the adverse effects of that extend beyond not just being able to pay for the shopping you want. Poor financial wellbeing is said to have negative consequences on your mental health, stress levels, ability to sleep, and cause potentially debilitating anxiety. As such protecting your financial wellbeing is vital and here are some ways to help you do it.
While budgeting can be seen as boring it can be a great tool to have in your arsenal. Firstly you need to sit down and work out how much you earn each month against how much you spend each month, and whether there is anything left over. By doing this you will be able to identify whether your spending exceeds your earnings or whether you are indulging in unnecessary spending. To help, break down your expenditure and categorize all of your outgoings into an order or priority to help you identify what expenses you are able to cut out. You might be surprised at the result and how a little tweaking of your monthly expenditure can go a long way to improving your financial wellbeing.
Saving and or Debt Management
Once you have determined your monthly ins and outgoings you will be in a better position to allocate an amount of money each month to your savings or debt repayment. If you have debts to pay then be sure to allocate a proportion of your monthly expenditure to debt repayment. Start by paying off debts with the highest interest rates. Once any debts have been cleared using the money that you were allocating to repayment to fund your savings account. Savings can be a great way to elevate some of your financial concerns as they provide reassurance that you have financial backing should something unforeseeable happen.
While insurance is an expense to add to your expenditure it is a crucial expense not to be overlooked. Insurance will give you and your financial well-being peace of mind. Insurance will protect you against unforeseen medical bills, housing complications, car accidents, business problems. There is insurance available for almost everything and while it is not being suggested you insure every aspect of your life you should certainly consider what is important and how insurance can protect it.
Despite your best endeavors, there may be times when you have to look to professionals to help protect you. Yes, it will come at a cost but it will be a cost worth paying. It may be that you need to seek legal representation, tax assistance, or financial planning advice. Whatever it is that will help secure and protect your finances is a protective step to take to improve and protect your financial and mental wellbeing.
Although it may seem a long way off it is never too early to plan your pension. A pension will be able to offer you long-term financial security and provide you with an income when you are no longer able to work for it. The earlier you start saving into your retirement fund the bigger to reward you will reap. Start now and put aside a bit from your salary every month into your retirement fund.
Improve your credit score
Your credit score can be an important metric in your life as it can help you when obtaining mortgages, credit cards, loans, even cell phone contracts. As such it is important that you maintain a strong credit score and here are some ways you can do that:
- Ensure you have some credit history. If you do not have any credit history a lender will have no point of comparison and your score is likely to be lower. You can start to build a credit history by taking out regular financial commitments such as a cell phone or credit card. That said, even paying undertaking utility bills will help improve your credit history.
- Prompt payments. One of the most important things you can do is to make your payments on time. All bills and credit should be paid on the day they are due to help alleviate any concerns future lenders may have regarding your ability to manage your credit and finances.
- Avoid moving home too much as lenders like to see stability and a regular change of address can give the opposite impression. While it is not a deciding factor having a regular long-term address will help to improve your credit score.