Improve Your Financial Wellness with These Five Tips

With Valentine's Day right around the corner, many of us are focusing on those special people in our lives and how we can show them what they mean to us. And that is certainly important…but I also want to challenge you to do something for yourself.

Self-love and taking care of yourself should be a priority - I'm sure you're familiar with the airplane safety speech…put the oxygen mask on yourself BEFORE assisting others. And that's great advice for other areas of your life too! 

As a financial advisor and money coach, I want to encourage you to do one thing this month that will help you improve your financial wellness. After working with hundreds of clients, I know that financial wellness can significantly impact a person's overall well-being. 

There have been countless challenges since March 2019, and now we're experiencing high rates of inflation and supply chain issues. So this is the perfect time to see what changes you need to make in the new year. During the last couple of years, did you feel like you had enough money to weather these challenges, or are there things you wish you were more prepared for? 

Here are five tips to help you improve your financial wellness in 2022. Remember you don't have to do them all - although that would be amazing! Even implementing one new habit can improve your financial health.

#1 Start or increase your emergency fund 

Hopefully, you already have an emergency fund, but if not, start one today with whatever you can budget for it. Getting started is the most challenging part! If you already have one, figure out how to build it up. We certainly have learned how unpredictable life can be over the last couple of years, so it pays to be prepared for the uncertainties in life, like unexpected home repairs, job loss or a reduction in hours, illness…just to name a few.

The first goal is to save the amount that equals 3-6 months of your expenses (including any family members' expenses that you typically pay). It's a good idea to keep building your fund until you have 12-18 months saved. Make sure your emergency fund is easily accessible to add to and withdraw from if needed.

#2 Review unnecessary and recurring expenses

Without a budget and a system for tracking expenses, many people spend way more than they think they do. Or they don't realize what they're spending money on. 

How many times have you checked your bank or credit card statement and wondered why am I still paying for that subscription or other service that I no longer need? Do you know how much you spent on take-out last month? 

It's key for financial wellness to keep track of these expenses, so you always know if you're spending within your budget.

 #3 Automate or increase your savings and investments 

Automating your savings is the best way to save! If the money goes directly into your savings or investment accounts, there is no way you're going to spend it on something else. I'm sure you have heard that it's important to pay yourself first before you start paying your bills, and automating your savings and investments is the easiest way to do that. 

There is so much flexibility offered with automation that you can customize the deposit dates and amounts and easily make changes too. 

If you're already using automation to save and invest, this is the perfect time to decide whether you want to make any changes - preferably increases!

 #4 Manage and pay down your debt

If you have consumer debt, make a plan to pay it off. The beginning of a new year is the best time to prioritize your debts and include them in your budget. How much extra can you put towards paying them off? 

There are online calculators that can help you figure out how long it will take to get out of debt, how much you can save on interest, and more. I like this one because it's easy to use and will give you a visual plan so you can see progress towards your goal. 

If you can only pick one tip from this list, I would recommend making a plan to pay down your consumer debt so you can be on the path to financial security and freedom!

#5 Learn to love budgeting (or at least like it!)

I know that you're probably thinking - love budgeting…never! But hear me out. There is real power, security, and well-being that comes with knowing how much you're spending and on what. You work hard for your money, and you have the power to put it to work for you the way you want. 

There are so many budgeting tools, apps, and styles. I can even bet that there is one out there that will work for you, and you may even find you like budgeting - even if you cannot bring yourself to love it! And budgeting is like any other skill - the more you practice, the better you will be at it. So challenge yourself to practice budgeting each month. I think you will LOVE the outcome! 

Bonus Tip

I know I said I'd share five tips, but I wanted to add this bonus tip because it does make a difference. And that is to find people who have similar money goals to yours, especially if you are just beginning to focus on taking care of your finances. 

If you spend your time with friends and family members who eat out all the time and love to spend most of their paychecks shopping every week, then you are likely going to feel bad about yourself and your goals, and you'll also probably follow along with their spending, derailing any progress you've made. 

So make a plan ahead of time to eat out with your friends once a week, once a month - whatever works for your budget. Same with shopping. You can even let your friends and family know you have a plan to improve your financial wellness and see if they will come along with you on this journey. 

Consider joining our Watch Her Thrive community on Facebook if you need additional support. It's a safe space for women to share successes and ask for help when needed, whether it's about debt management, budgeting, investing, or increasing income. This is meant to be a positive resource and a judgment-free space to help each other reach our financial goals. 

So take some time during this month of love to implement at least one of these tips to improve your financial wellness. I think you'll see that taking care of your finances will improve your overall well-being.