8 Reasons Why You Need to Think About Your Financial Wellness
We all know that physical fitness is important for our overall health, but what about financial wellness? Just like our bodies, our finances need to be in good shape in order to function properly. That’s why it’s important to understand the concept of financial wellness and how to achieve it. In celebration of global wellness day, we would also like to dive deeper into one of the most overlooked integral aspects of our holistic health—our finances.
What is Financial Wellness?
Financial wellness is a term that is used to describe the state of one’s financial health. It takes into account both your physical and mental well-being when it comes to money. Many factors contribute to financial wellness, but the most important ones are having a budget, sticking to it, and being mindful of your spending.
It is all about having your finances under control and making smart decisions with money. This includes management of your savings, investments, debts, and expenses. Financial wellness can also refer to your financial knowledge and habits. It involves you being in control of your finances and having a good relationship with them.
Top Reasons Why You Need to Think About Your Finances
1. Stress That Leads to More Serious Health Issue
Do you know that majority of Americans can attest that finances are their number one source of stress? Many people experience financial stress at some point in their lives. It can be caused by several factors, such as job loss, medical bills, or credit card debt. Financial stress can also lead to anxiety and depression, affecting your physical health later on. If you’re feeling overwhelmed by money troubles, there are ways to get help. You can start by investing in money management mobile apps like Moolamore. Investing surely sounds easy but you won’t be able to successfully do so without managing your income and expenses.
When you’re financially stable and free, you will become more confident that you can handle inevitable financial hurdles that come your way. Your stability in this aspect begins with tracking, managing, and forecasting your cash flow.
2. Out-of-control Spending
Spending on unnecessary things from left to right will add up and leave you without a single cent. Financial control is crucial and you do this through budgeting. When you know where your money is going, you will be surprised at how much you have saved.
3. Not Enough Savings
You know that feeling when you can’t seem to get ahead financially. When every month feels like a struggle and you’re constantly worried about money? Not having enough savings get you stuck in a rat race. On the other side of the coin, setting aside savings to plant your money trees will give you long-term financial security.
4. Stagnant Financial Situation
Dollar bills get lesser value over time, and this is simply because banks keep printing money. Things get cheaper when supplies are high. Therefore, keeping your hard-earned money in a stagnant place is not a very wise move. Getting familiar with stocks, real estate, and investing in things that appreciate their value over time is what you need for financial freedom.
5. You Get to Spend More On Liabilities
Lack of financial wisdom will sooner or later lead you to spend on liabilities that you think are assets. Assets are money machines that work even while you’re sleeping. Liabilities on the other hand are anything that requires you to spend more than what you earn from it. A house for example is a liability that requires you to pay taxes, power and electricity, and renovations regularly. On the other hand, a house that you rent out to people daily or monthly is an asset, because you are earning from it more than what you spend on its maintenance.
6. Unhealthy Debts
Creditors are everywhere today. Without financial awareness, you will think that these schemes are working in your favor. Unfortunately, credit cards for example will just dry up your earnings or savings since they give you the convenience to spend on liabilities than assets.
7. Lack of Emergency Funds
Having an emergency fund is a crucial part of personal finance. An emergency fund is a money that you set aside for unexpected expenses, such as medical bills, car repairs, or job loss. Having an emergency fund can help you avoid debt and financial stress in the event of an unexpected event. With financial awareness, you get to create other means to take care of these unexpected bills. You can invest in life and health insurance instead, for example.
8. You Don’t Get to Live Life to the Fullest
Do you want to just go through the motions and hope for the best? Or do you want to take charge and make things happen? Living life to the fullest does not stop at making yourself happy. It also is all about sharing that happiness with the people around you. Being financially free means funding the comfortable lifestyle that you’re aiming for yourself and the people you care about. The best things in life may be free but the world still has a lot to offer that’s worth exploring.
It’s no secret that money is a major source of stress and discontentment for many people. Problems that come with it even bring out the worst in some. That’s why it’s so important to take care of your financial wellness. Financial wellness is all about maintaining a healthy relationship with money. This means making smart decisions with your finances and being mindful of your spending habits. With the worst-case scenarios mentioned above, you’ll be more inspired to level up your finances this early.