Many people would rather disregard their financial mismanagement and put it out of their minds as they go through life. They think there’s no need to listen to sound financial advice to help them solve their dwindling finances. However, the truth is that financial literacy can help us significantly improve our financial wellness.
So, how are your finances?
This is a daunting question and can sometimes be left unanswered. After all, there are times when we may try to avoid the truth that we need to change our ways, particularly in handling our finances. But take comfort in knowing that all of us, at some point, have experienced being financially drained and defeated.
Moving forward, we need to look for ways to avoid falling into the same trap. Simple finance tips and tricks will surely help us get better at handling our money in the present to prepare for the future. Take this reading as your first step to improve your financial wellness.
How Do We Improve Our Financial Wellness?
Research has shown that people who have experienced financial distress were able to rise back up by changing their mindset and behaviour toward financial management. Here are some ways to help you shape your financial wellness.
1. Maintain a Financial Plan
This is done by creating a list with three columns—money coming in (receivables), money coming out (payables), and the remainder. Creating a budget for your expenses helps you see where you need to improve. For example, you may need to reduce your expenses by buying less expensive things, decreasing restaurant visits, and cutting off unnecessary subscriptions.
2. Save Your Extra Money
When you’ve established an understanding of how your money flows, you’d be able to see where you may be leaking cash. From there, you can turn these leaks into savings and gradually increase your stash over time. Small amounts, when consolidated, could go a long way and save you in times of need!
3. Save for Emergency Situations
Research suggests that having an emergency fund of around $4,000 to $5,000 is a good backup you can use for emergencies or unforeseen expenses. Keep in mind that your emergency fund should be entirely separate from your regular savings.
Maintaining an emergency fund will help maintain your financial health and security. In the event of an unforeseen situation, you will not have to borrow from lenders with high interest rates.
4. Share Your Finances with Your Significant Other
Open communication between you and your partner in terms of financial matters is a good thing to have. This saves you from conflicts and financial woes as both parties are considered and listened to when making financial decisions. Your financial wellness as individuals and as a couple can be a team effort!
5. Seek Financial Help
Asking for help when you need it is not a shameful thing to do. If you are in over your head, you can talk to your financial provider about assistance, and they will help you if you claim financial hardship.
Financial firms should be amenable to accepting requests to adjust payment terms when you are struggling due to some large expenses. Don’t be afraid to ask for help.
Conclusion
Having a sound mindset in the financial aspect of your life will keep you stable and comfortable through the tough times. Seeking professional help for your financial struggles is part of owning up to your lapses and taking responsibility for your own finances.
If you are looking for the best financial advisors in Australia, New Wave Advice is on your side to help you achieve financial wellness. No matter where you are in life, we can help you get the most out of it. Get in touch with our experts today!
