It’s quite interesting how our entire lives and daily emotions can be affected with a little change. Our outlook on life, self-confidence, identity and esteem are interwoven in a way that one positive or negative interference causes our perspective on life to change. It’s why we obsessed over a pimple at some point in our lives and put extra effort in ensuring our mental and physical health.
We are almost perfect in keeping most parts of our health in shape. We eat balanced diets, have a skincare routine and know what beauty products work best for us. There’s just an aspect of health that most people don’t pay attention to and that’s financial health.
Are you among those who can’t wait for their next paycheck by the middle of the month? Or you work from home and spend as soon as you earn?
From most of the ladies I’ve seen, they become sober and promise to do better next month but fall into the same pattern once cash gets into their hands. You may think this doesn’t apply to you because you don’t actually run out of cash but you hardly save or you spend more than you save.
Do you save but wonder if you can multiply your savings with little to no risk.
If any of these categories define you in any way then you need to take a stand today because your life unconsciously reflects your financial state. Financial stress can cause sleep problems and migraines which can be avoided with a few quick steps.
What exactly is your financial health
Just like your mental and physical well-being, your financial health is a state of monetary well-being. It can be measured in terms of your savings or retirement fund. The state of your personal finance is your financial health. To really track your financial health, you need to be true to yourself. Is your current net worth positive or negative? Are you working actively to have a nests egg at retirement? Can you afford everything you need and all the things you want without blowing a hole in your bank account?
5 steps that will improve your financial health
Before you begin, you’d need to calculate all your assets, that is everything you own; your income, cars, retirement funds and avoid adding things that aren’t truly yours like gifts you’re expecting. You can’t totally control your finances because you don’t control the country’s economy and price of goods. However, here are some tried and true steps to keeping your financial health in tip-top shape!
Start actively saving
There’s no need to beat about the bush. Anyone without savings is like hair without shampoo. Saving not only gives you peace of mind but also feeds your self-confidence and projects you as comfortable and independent. If you’re guilty of feeding your pleasures every time like I was, this is the time to cut it. It’s not too late for a New Year resolution, I think. You should have more than one bank account so it’s easier to take out your savings first once the paycheck rolls in. If you already save, consider putting your money to work in investments. It’s another step I’d discuss that would help your growth.
Create a realistic budget
Making a budget is one of the easiest things to do. It’s like a skin product. You have to stick to it if you want it to work. In creating your budget, you should not only account for things you plan to spend on but also things you don’t really need that you can cut back on. For example, some subscriptions or the frequency you buy things you want (if you’re on a slightly tight budget).
I believe the 50/30/20 is the easiest budget rule. To spend 50% of your income on needs, 30% on wants while saving or investing the last 20%
You can use some budget apps or spreadsheets to create your budget. It is not advisable in any way to increase your spending just because of your income increases. Imagine trying to fill a bucket with a hole at the side with water. Impossible right?
Pay your debts if you have any. A debt-free life equals financial health. Some people still have student debts weighing over them. There are two ways to paying off debts. You can pay the low-interest ones first and work your way to the higher interest ones. Or you can pay the highest amount on the high-interest debts while paying a minimum on the low-interest debts. The faster you pay your debts the lesser worries you have on money-related issues. You’d be well on your way to all-round health with a debt-free life.
Build your Emergency fund
Would you consider yourself prepared for unexpected events? Do you have funds set aside for that? Emergency funds improve your financial health by a long shot. The idea behind them is that you have back-up asides your usual savings for unplanned events like job loss, repairs and hospital emergencies. An ideal emergency fund should have about 4 to 6 months’ worth of your living expenses. I believe you can start small and grow your fund as time goes on.
Improve your financial health by building your emergency funds today.
Put your money to work by investing. It’s a plus since it’s just more money with little or no cost to you. You can invest in a side hustle and use your savings as capital to grow your income. Or you can invest in some profitable business. Be sure to confirm that the business is legit and has good potential for investment. You can always start by investing with your local bank and move on to other companies.
Quick tips to improve your financial health
• Try to use less of your credit card. It’s very easy to just slot the card in and spend
• Automate your payments and savings. To ensure that you save often, automating your savings with your bank is a good idea and the same goes with your needed subscriptions
• Take advantage of sales. It’s the same product at a cheaper price for you.
• Grow your retirement fund and invest in it today. It’s for your benefit
It’s safe to say that putting effort to ensure that you are financially healthy just adds to your wholeness and preserves your shine. Your inner satisfaction reflects in your life and spreads to everyone around you. Begin your journey to an overall healthy life today.
ABOUT THE AUTHOR
Ayomipo Adelakun is a web content, article and blog post writer. She loves working with small businesses to plan and create super quality content that attracts and converts their target audience. When she’s not writing, she’s trying to improve her blinding dancing moves, improving her public relation skills and researching for her personal finance blog at Mimistidbits.