Steps to Financial Wellness

The concept and understanding about Financial Wellness differs from person to person. Everyone has a different understanding of what is means, however here are a few basic steps you could follow to achieve wellness in your financial status:

1. Make a list

Start with understanding your financial commitments by making a list of all your expenses. For example, the groceries bill every month, money paid towards credit like clothing accounts, credit card etc., any loans like home or student, utilities like water, electricity etc. and any other expenses.

It is important to know how much you spend and ask yourself these questions:

Which expenses are essential to have, and which are nice-to-have?
What am I doing to plan for the future i.e. investments and savings?
What are my financial priorities and goals?
How can I manage my money s little bit different to achieve a better result?

2. Create a budget

Achieving financial wellness is about planning, and planning includes using a monthly budget. By having a budget you can plan for expenses to a great degree and control your expenditure, making sure there is enough money left for saving and investment.

3. Reduce your debt

We live in one of the highest overindebted countries in the world, where citizens have more debt than what they can afford to pay. Ask yourself: “do I know how much interest I pay on my debt?” Reducing and/or eliminating debt (such as from credit cards) as quickly as possible is vital for financial stability.

4. Create an emergency plan

Life is unexpected. COVID-19 taught us that life can change in an instant. It’s important to have a nest egg to cover potential emergency funds that appear in unforeseen circumstances. Financial experts recommend individuals have three months’ worth of living expenses saved. For families, they recommend six months of living expenses saved as part of an emergency fund.

5. Invest in the future

The general recommendation is to save 14-17% of your gross salary towards a pension fund. Don’t get caught in your 40s or 50s with a pension savings balance that is too little to survive on once you are retired – the earlier you start contributing the better! Speak to a Financial Advisor about pension fund options.

6. Grab hold of learning opportunities

If your employer offers financial wellness programs, take advantage of them to learn as much as you can about managing personal finances.

With the right tools and resources, you can make smart financial decisions for your financial wellness (Add a budgeting tool template for downloading) .