Given the current troubled times, let’s normalize and ask friends and family directly, “How is your financial well being?” It’s a strange question, right; It may even sound intrusive to some, but it can be constructive when someone has asked you. If you have been asked with this question, you may not know how to answer it because you may not be aware of it. According to a study by the National Endowment for Financial Education, only 24% of millennials have basic financial literacy.
So let’s answer that question in this article and equip you with some steps you can take to ensure your financial well-being.
Financial wellbeing is like a fitness plan to improve your relationship with money.
Sure, we all have money problems from time to time. Just as we eat healthily and do sports, we feel good in our bodies. Positive money habits help us feel financially comfortable. In simple terms, financial wellbeing encompasses all areas of your life financially.
It’s about knowing how much we need to spend, making smart financial decisions, and being aware of the upcoming bills and debts that have to be paid. And while we’d all like to have millions more in the bank, good money management means getting the most out of what we already have. Unfortunately, we are not taught financial wellbeing in school, and therefore not everyone understands the implications of creating positive money habits.
The way we manage our finances negatively affects our lifestyle and stress levels.
According to Money Habitudes, 65% of women and 52% of men said financial matters weigh on them the most. On average, workers spend three hours a week and one sick day per year dealing with economic problems. This stress can occur for many reasons, such as: B. because he has difficulty paying bills or the budget. In addition, poor mental health can make money management difficult, while worrying about money can make mental health worse. It’s a vicious circle that can be broken with the help of the following financial wellness mantras:
Spend wisely and within your means: To be financially secure, we need to sit down at the beginning of the month, analyze our income and plan our expenses accordingly. We should evaluate where we are in terms of spending and budgeting several times a month and make the necessary adjustments. This type of saving and budgeting is smart financial management and gives us a sense of control over our finances.
Have an emergency fund: As much as we hate the curveballs of life, we cannot escape them. A surprising auto repair bill or a medical emergency can throw our budget off balance. This is where an emergency savings fund comes to the rescue. The current pandemic and its medical and financial side effects have shown us the importance of an emergency fund. We need to reserve at least 3-6 months of our income to ensure that our budget flows through unforeseen expenses and that we don’t have to use our credit cards to cover emergencies.
Have a financial plan for the future: Regardless of what age you decided to retire, it is neither too early nor too late to put money aside for the retirement years. It is best to start in the early years of earnings. But even if you didn’t have the money back then, you can start now. It doesn’t matter how small the amount we can put aside. It can be increased as our income grows.
Get the Insurance You Need: Everyone tells us how to invest in good health insurance, but nobody tells us that disability insurance should also be added to the portfolio. Furthermore, the role of life insurance in providing for your survivors cannot be overstated.
Practice money mindfulness: It is a habit that helps us become more aware of how we are spending, saving, and investing. When we are aware, we have more freedom to be masterful of money without giving in to impulses. Money mindfulness does not magically make money appear in our bank account or wipe out personal credit. Still, it has far-reaching benefits such as reducing stress, increasing self-esteem, and improving focus and decision-making.
Financial wellness programs in the workplace
Just because financial wellbeing is personal doesn’t mean it is just an individual effort. The issue of financial health has become so important that employers are increasingly offering financial wellness programs in the workplace. Get Well-thy India, presented by ICICI Lombard in partnership with The Times of India, is an initiative to help you find out your current wellness score so you can start your journey to real wellbeing right away. Because well-th is real wealth! If you want to determine your financial wellbeing, you can evaluate and educate yourself.
Disclaimer: This article was produced on behalf of ICICI Lombard by the Spotlight team at Times Internet.
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