A woman paying for coffee, confident in her financial wellness.

Financial Wellness: What Is It and How Can You Improve Yours?

Tapcheck Team   September 09, 2022

Striving for wellness is a worthy goal no matter what aspect of life you apply it to. Whether you’re creating an exercise routine for physical wellness or taking time each day to meditate for mental wellness, establishing beneficial routines in your daily life can set you up for success in the long run. In fact, this mentality can also be applied to the often-overlooked idea of financial wellness.

Financial wellness may just sound like some fancy buzzword that someone in the industry might use, but in reality, it’s an important concept that can positively affect your overall financial situation. Just like mental or physical wellness, when you implement positive habits related to your finances, you can work your way towards improving your financial wellness. But, what exactly is it? And what can you do to improve your financial wellness? Let’s take a look! 

What is Financial Wellness?

Financial wellness is the concept of effectively managing your personal finances. This effective management includes spending within your means, being prepared to handle unexpected emergencies, having a plan for your future and retirement, and having a clear budget that you stick to. 

There are, of course, factors that can make financial wellness more difficult to achieve. For example, if you are in debt from credit cards and student loans (without a measurable plan to pay these off), financial wellness can be harder to reach. Additionally, factors outside of your control such as inflation can make this more difficult. 

Even though financial wellness probably won’t happen overnight, it’s still a worthy goal that’s worth working towards! And, it’s not impossible to improve your financial situation.  

Benefits

So, what’s the point of working toward financial wellness? Why bother establishing these routines in the first place?

Those are both great questions, so let’s get into it! Finances impact all parts of your life. When you reach a place where finances become less of a stressor, it can improve your overall mental wellbeing. There will be less time in the day when you find yourself worrying about how you’ll make that next payment or whether you’ll be able to save money for the future. 

Improving your financial wellness can also positively impact your work/life balance. With a handle on your finances, you can spend less time during the day thinking about how to make more money and more time focusing on the things you care about – like your family, friends, and hobbies. 

How to Improve Your Financial Well-Being

Now that we know what financial wellness is and why it’s important, let’s discuss a few tangible strategies that you can use to get yourself closer to that ultimate goal!

Create a Budget and Stick to It

Creating a budget is the first step in managing your finances. By keeping track of what you spend and in which categories you spend the most, you’ll get a better picture of your overall spending habits. You may be surprised in which areas you spend the most money! With a budget, you can give yourself spending parameters, keep yourself from overspending, and start setting those smart money habits that will guide you towards financial wellness. 

Build an Emergency Fund

You never know when life is going to throw you a curveball that hits you right in the wallet, which is why building an emergency fund is so important. Unexpected funds are just that, unexpected, which is why it’s a smart idea to be prepared. Add a line item in your budget to go towards building a fund for unplanned expenses so that you aren’t as negatively financially impacted when these expenses pop up. Even just putting a few dollars from each paycheck into a dedicated fund for emergencies can be beneficial!

Plan for the Future

When you’re living paycheck to paycheck, planning for the future may not be one of the first things that come to mind when you have so many bills that need to be paid immediately. But, it’s worth thinking about your future self when managing your finances. Consider setting up an IRA or Roth IRA to contribute part of each paycheck towards a future retirement. Over time, you can begin building a fund that your future self will be thankful for. If your employer offers matching contributions towards a 401(k) or any other retirement plans, these are things that you will want to take advantage of.

Manage Debt

Managing debt is crucial when pathing towards financial wellness. With the help of a solid budget and the self-discipline to stick to that budget, you can take steps toward managing your existing debt. Try not to go further into debt by maxing out credit cards or taking out additional loans. Instead, make a concentrated effort to pay down your debt so that you can work your way towards eliminating it completely. Then, you can use each paycheck to take care of current bills and even contribute to your future. 

Improve Your Financial Literacy

One of the most important steps that you can take towards improving your financial wellness is by improving your financial literacy. When you increase your financial knowledge, you will be more equipped to make good financial decisions. If your employer offers resources that can help improve your financial literacy, take advantage of them! 

Achieving a state of financial wellness is a practical goal for anyone who wants to improve their financial situation. It benefits your life beyond your financial situation, helps build good habits, and creates a foundation to help you build a more sustainable financial future.

Tapcheck Team

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