5 Ways to Kick Off Financial Wellness Month
- Financial Wellness Month, celebrated annually in January, allows us to begin our journey toward financial fitness.
- When you're financially fit, you can meet your basic needs and save for goals such as buying a home or starting a business.
- Financial Wellness Month is the perfect time to get you back in focus if you are stressed about finances.
A new year inevitably inspires us to turn over a new leaf in our lives. What better way to get started than with our financial well-being?
Financial Wellness Month is celebrated annually in January, allowing us to do just that. This month can be a great start to learning the value of a financial wellness plan. Below are five ways to start creating your financial wellness plan.
The Value of a Financial Wellness Plan
Before diving into the ins and outs of financial fitness, let's talk about why financial wellness is important. It's simple, the better you manage your money, the more freedom and peace of mind you'll have. When you're financially fit, you can meet your basic needs as well as save for things like:
- Create an emergency fund
- Save for a vacation
- Buy your first home
- Start a business
- Fund your retirement
In short, when you're financially fit, you can develop a plan that turns your life goals into reality.
Recommended Read: Budget for Self Care
The Top Five Places to Start Your Financial Wellness Plan
Starting a financial wellness journey can seem overwhelming, but it doesn't have to be. With a bit of planning, you can set yourself up for success. Here are the five most important steps to start your plan.
1. Create a budget
One of the most important things you can do to improve your financial wellness is to create a budget. A budget, also known as a spending plan, will help you track your income and identify areas where you can cut back. You can allocate income, expenses, and savings better when you have a plan.
The first step in creating a budget is determining your income, including all sources such as salary, side gigs, investments, and any other recurring income. Next, list all your regular expenses, including rent/mortgage, groceries, utilities, transportation, and insurance.
Tracking your spending for at least a month will give you a good idea of where your money is going. In addition, setting financial goals, such as saving for a down payment on a house or paying off credit card debt, will help guide your budget.
Once you have a clear picture of your income and expenses, you can create a budget that allocates your money towards your goals and necessary expenses while staying within your means. Remember to regularly review and adjust your budget, whether weekly or monthly, to stay on track. With a well-crafted budget, you'll be on your way to achieving financial stability and reaching your financial goals.
Recommended Read: 6 Tips to Break The Cycle of Living Paycheck to Paycheck
2. Reduce debt
High debt levels can be a major source of stress, so it's important to take steps to reduce your debt. This might involve paying off credit card balances, consolidating loans, or working with a debt counselor.
One way to reduce credit card debt is to prioritize paying off debts with the highest interest rate, as this will save you money immediately. Consider consolidating your credit card debt by transferring your balances to a card with a lower interest rate. It's also important to avoid taking on new debt while paying off existing debt and cutting unnecessary expenses.
3. Save for the future
Another key aspect of financial wellness is saving for the future. This might involve setting up a savings account, investing in a 401(k) plan, or creating a plan to save for a major purchase or event. One of the most effective ways to save for retirement is to start early and make regular contributions. If your employer offers a matching retirement program, you will want to take full advantage of this benefit. Not doing so is the equivalent of leaving money on the table.
Of course, if you contribute nothing, your employer will match your goose egg with no contributions towards your retirement. To help you make consistent contributions, consider putting these contributions on auto-pilot through automatic deductions.
Recommended Read: What is an Estate Plan, and Why Should I Have One?
4. Seek financial advice
Finding a personal financial advisor can be a valuable step in achieving your financial goals if you're struggling with your finances. A good financial advisor can guide your budgeting, saving, investing, and retirement planning and help you navigate complex financial decisions such as buying a home or starting a business.
When looking for a financial advisor, finding someone who aligns with your needs and goals is important. Therefore, many advisors will offer a complimentary initial consultation. You can use that session to discuss your financial goals and ensure that you feel comfortable with their approach and communication style.
5. Take care of your mental health
Financial stress can affect your mental health, so taking care of yourself first is important. The old financial adage, “pay yourself first,” also applies to taking care of yourself first too. If you are exhausted and mentally drained, you can’t be the best in your everyday life, let alone your financial life.
A few ways to take care of yourself include exercising, practicing mindfulness, and engaging in stress-management techniques such as meditation, yoga, or deep breathing exercises. In addition, by coupling eating healthy and getting enough sleep, you can prepare to conquer the day and your finances.
When you are gearing up to set and achieve your goals, make sure you have the right support system around you. Friends and family can contribute to your mental health, so if you have a positive team that can help you stay accountable and focused, it won’t feel as challenging on the path to accomplishing your goals. These methods will help you to maintain good mental health and a sense of balance.
Recommended Read: Relationship Between Mental Health and Money
Put Your Plan into Action
Managing your money can be a serious topic, but it doesn't have to be boring. It's all about finding the right approach for you. Here are a few ideas to get you started:
Gamify your financial goals
Set financial goals and track your progress. Then, each time you reach a goal, reward yourself with something small, like a night out with friends or grabbing a bite to eat at a new inexpensive restaurant in town.
Get creative with your finances
Instead of considering budgeting a chore, consider it an opportunity to be creative with your spending. For example, try finding ways to save money on things you love, like cooking or fashion.
Talk about money
Financial wellness doesn't have to be a solo journey. Invite friends or family members to join you on your financial wellness journey and hold each other accountable.
The Money Wrap-Up
Financial wellness is an ongoing process. So, it's crucial to make it a priority all year round. But focusing on your plan during Financial Wellness Month can be a great way to get started. The key to having optimal financial success is to be intentional and consistent. You deserve wealth, health, and happiness this year and beyond!