Are You Financially Well?
Updated: Apr 3, 2020
The following is an article “Are You Financially Well?” by Marc Primo.
We do all sorts of things to keep ourselves well. Some of us work out, eat right, and meditate to be physically and mentally fit. Losing track of our health goals can lead to dire problems in the future. So is the case when it comes to our financial wellness. It’s something that concerns anyone who works, and now might just be the right time for you to look into how well you’re really doing financially.
90% of companies today now include financial wellness programs as an employee benefit. But do you really know what financial wellness is?
Being financially fit is more than just knowing what you make, how you keep a good credit score, or have ample net income. Financial wellness is the condition of being free from financial pressures. You must be living within your means, have an emergency fund in place, and are managing minimal debt or none at all. It also means that you have ample savings for the future.
Ask yourself these questions and assess if you’re on the right track towards meeting your financial goals,or are in dire need of help:
Are you financially pressured? You’re the only one who can really tell if you are financially stable at the moment or are experiencing stress from your monthly bills and debt. There are some cases when people are so worried financially that it adversely affects their own health and work performance. It will be a whole lot easier if you acknowledge your money woes so that you can take the first step in seeking help and solving your problems. There are a lot of ways you can pay off debt. You can go to a consumer credit counselling agency that can come up with a monthly scheme or a debt management plan to settle what you owe creditors. Consolidating all your debt also makes it easier for you to manage your payments.
Are you able to manage debt? The first rule in your journey to financial freedom is to live within your means. Debt is incurred from doing the exact opposite, and will jeopardize your financial goals. Living within your means doesn’t necessarily mean you’ll have to live as a miser. It’s just a matter of knowing the difference between your ‘needs’ and ‘wants’. Allot the right amount for your monthly expenses and assess how much net money you take home. Compute your net income per hour and ask yourself if your ‘wants’ are really worth buying. It’s always wiser to spend less than what you earn, and looking for extra income gives you more leverage to spend without opting to borrow money.
Do you have enough savings for the future? Having an emergency fund is one sign that you are financially stable as it minimizes stress during difficult times. If living within your means is the first rule, saving money for the future is the second. Most people would think that they can’t save up while having to deal with debt and they’re right. Pay off debt first especially when the interest rates of your credit card can skyrocket in a short period of time. The only time to save up is when you only have fixed-payment loans such as mortgages or student loans, or when your savings interest rate is greater than what you owe. Having both active and passive income also helps you pay off debt faster, and can give you control on how much you can allot for your emergency fund.