Practicing Financial Wellness

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How to integrate life planning and financial planning

10 Steps on How to Practice Financial Wellness

What financial wellness is? Wellness is a “hot topic”. When you hear about it you probably think of yoga, matcha tea, retreats by the ocean, etc. There’s another side of wellness that can go overlooked in the hustle and bustle of life, but it’s just as important as what you do for your physical well-being.

We’re talking about financial wellness. The state of a person’s finances can have a big effect on almost every aspect of their life. And it can be hard for someone to prioritize the healthy habits conducive to physical and mental wellness when their finances are out of whack. In a way, it all comes down to financial wellness.

Taking control of your financial health is a learning process. There are things you can do that will have short-term benefits, and things that won’t pay off until well into the future. It’s never too soon to get proactive about your financial well-being.

  • Make a budget

What are your expenses and how much is coming in?  Creating a budget means balancing your income and your cost of living. While some expenses can’t be controlled, and financial emergencies may come up every so often, you should have an idea of what your regular expenses are.

  • Create savings goals

Building up a savings account and adding to it regularly is also a good thing to prioritize. Whether it’s a portion of each paycheck or some money you’ve saved by reducing an unnecessary monthly expense, opening and adding to a savings account is a definite part of financial wellness.

  • Look at your debt

Whether it’s credit card bills, a car payment, or student loans – anything you owe money on is debt. Not all debt is equal though. And neither are all interest rates on that debt. Learn about good debt vs. bad debt (assets that appreciate vs. depreciate), how much of your payment is going to the interest on your debt, and when you expect to be finished paying the debt off.

  • Set career goals

This will be different for everyone, but maintaining or improving your career situation can have a great effect on your financial well-being. Having a plan for your career can help you keep your financial life healthy.

  • Decide to invest or not to invest

Investment often means creating multiple streams of income, or purchasing something that will increase in value, thus increasing the buyer’s net worth. Weigh your options and consider your finances and your current and future goals.

  • Home: Rent vs. Buy?

Housing can take up a lot of your income. It’s a top expense for many, and choosing where to live affects not only your personal and professional life, but your financial life too. Both renting and owning can have their benefits.

  • Plan Your Retirement

Being able to retire – or retire comfortably – can depend greatly on your financial situation. Getting a start on your financial wellness plan well before retirement can be a good idea.

  • Build Your Estate Plan

Your Estate is anything you own – physical property, intellectual property, anything of current and future monetary value. Setting up an Estate Plan determines not only what will happen to those things should you no longer be able to manage them. An Estate Plan also includes medical directives, like a Living Will.

  • Craft a Will and/or Trust

Trusts and wills are created as a part of estate planning. It includes what will be distributed to your heirs – and it is where creditors will go to settle debts. A will outlines distribution of property, valuables, and sentimental items. A Trust can be created to transfer ownership at any time or to help manage sums of money, among other uses.

  • No procrastinating!

You can get a start on your financial wellness today. Financial wellness is taking care of yourself and what you own – and Estate Planning does just that.