When we think about our overall wellness, our finances may not be top of mind, but they should be! A strong sense of financial wellbeing reduces stress and contributes to an enhanced sense of emotional wellbeing. The sense of security and freedom we have when our finances are in order gives us greater peace of mind both now and for the future. Here are two success strategies and some pro tips to help you make financial planning a priority:
#1 Success Strategy: A Written Budget
A budget is your opportunity to put your money where you want it to go. Here are three tips for budgeting:
Follow the ‘50/30/20’ budget. Using your monthly take-home pay, allocate 50% toward necessities (rent, utilities, childcare, insurance), 30% toward wants (all the extras: movies, meals out, etc.) and 20% toward savings (401K, emergency fund) and paying down debt.
There are numerous tools to keep you on track. I found success using a digital ‘cash envelope’ app that will allocate money into spending categories based on my 50/30/20 priorities, and another that rounds up spare change from my checking account and deposits it daily into my savings.
Identify your budget trigger. Mine is the skincare aisle at Target. Those seemingly small $12 individual purchases added up when I realized they were occurring a few times a month and breaking my budget. Now, I spend more mindfully, doing research, evaluating my purchase decisions and indulging in a priority item with delighted consciousness.
#2 Success Strategy: A Savings Plan
You can make saving a priority using the 50/30/20 budgeting tip above. It can be helpful to establish a goal to keep you motivated. Start with these three questions:
What are you saving for (a baby, a vacation, a house)?
How much do you need? (research current cost)
What’s your timeframe (when do you need/want the money)?
Saving can feel overwhelming, and even discouraging. Getting started might be the hardest part, just like for any wellness program! Your takeaway here is that even small amounts can make a big difference when it comes to savings. Here’s an example: Starting with $1,000, then regularly add $25 per month, after 5 years, that initial $1,000 will have grown to more than $3,000 (at 6% interest). Search for a free ‘Compound Interest Calculator’ online to calculate for yourself and see how your savings can add up over time.
And don’t forget to find a positive, simple, nonmonetary reward to help offset your ‘perception’ of sacrifice. Look for fun, free options to activities that you may have previously spent money on or use your 50/30/20 budget to plan for special occasion spending.
Just as with your overall wellness, better financial health is a life-long journey. Financial security and financial freedom are your target destinations and your emotional wellbeing is the welcome rest stop along the way.
Susan Kolon is a certified health coach specializing in wellness education. She works with corporations to improve employees’ overall physical, social, and emotional well-being. You can see her videos at tv.welnys.com/catalog