It’s no secret that there is often a direct correlation between financial pressure and mental stress.
In fact, one of the biggest things people worry about is money, so it’s important to review your finances regularly. With the 2017-2018 new financial year sprung upon us so quickly and many resolutions involving money, now is a good time to analyse your financial health.
What is financial health?
It’s hard to figure out how to be financially healthy without first working out your current level of health. Unfortunately, it’s not often as simple as drawing up a budget and sticking to it. Essentially, it involves the re-evaluation of every aspect of your finances, including your earning, spending, saving habits, as well as your credit score. Keep track of your progress by conducting regular revisions, maintaining stable purchasing habits and self-monitoring your spending.
So how can your wallet stay healthy for the next financial year?
The first step should generally be to establish the main points of financial pressure in your life. Whether you’re paying off a mortgage, rent, credit card debt, or have a dangerous shopping habit, these all need to be considered.
Secondly, draw up a budget. Take a close look at every point of income and expenditure. These costs can include living expenses, transport, food, and various other expenses. Income can include any revenue you earn, whether it’s in the form of a salary, investments, dividends, or interest. Look over your statements for the last few months so you’re able to gain a big-picture view of how much these expenses are costing you in the long term.
Also, see if you can switch to a cheaper option for items you pay for on a regular basis. For example, if you have a home loan with a certain bank, compare packages with different lenders and see if you can either switch, or save money by asking your current provider for a better offer. If you are paying for something such as life insurance, have a look at a guide to switching and see if there is a policy that offers better value and suits your needs.
Once you’ve reviewed your finances this way and eliminated some items, the most important thing to do is stick to it! Set goals to keep you motivated, or try to involve a friend. For your own mental health and consistency, it’s a good idea to do this with someone else so that you have their support. This way, you can keep track of each other.
Finally, take a step back. Sometimes, all we need to do is breathe. Dealing with finances can be very overwhelming, and it’s important to sometimes just remove yourself from the situation. If you’re still confused, check out some more budgeting tips for first timers.
If you feel like it’s too much to take on, that’s okay! Often you can approach a bank or a lender for a free financial consultation or you can seek advice from friends and family. Your happiness comes first and should be the priority.
Becoming financially healthy doesn’t necessarily need to be as scary as it may seem right now. As long as you can line up your expenses and see where your money is going, you should be able to get back on track. By establishing good habits now, you’ll be able to have a happy and financially healthy 2017-2018! Good luck.