5 Tips For Financial Wellness
Our financial health is something we should all work on every day. Financial wellbeing is the difference between living from paycheck to paycheck and snowball loans, financial freedom and having what you want.
If you change the way you think about money, you can change the way you spend it too. Which in turn will change your life. The key to financial freedom is understanding where your money is coming from and how you are spending it.
In this article, we’re going to teach you 5 skills that will help you improve your financial wellbeing.
1) Think carefully before taking out a loan
Loans can be amazing things.
A car loan means we can take a new job farther away and make more money. A mortgage means that you can move into a bigger house and no longer have to pay rent every month. And a personal loan can help clear bills and keep you from having your water or electricity turned off.
However, in some situations, taking out a loan is not the right option. And a loan for the wrong situation can often prevent you from getting one when you need it later.
So before you get a loan, make sure that you really need it.
More tips for getting a personal loan – click here.
2) Don’t ignore your creditworthiness
We repeat – don’t ignore your creditworthiness!
Your creditworthiness can have more of an impact on your life than just keeping you from getting a loan.
Bad credit means you will be offered worse interest rates on any type of loan or credit card you take out. Which results in you losing more money over time.
Many employers also check your creditworthiness before hiring you. That way, they can judge if you are a responsible person and if they want to trust you in order to make money for them.
So how can you improve your credit score? Well, the easiest way to improve your credit score is by paying your bills on time and paying off your loans. Here are some tips to help you do this.
3) Cut your household bills
The first thing to check out when trying to save money is that you are not spending too much on your bills.
Go to a price comparison website and see if you can get a cheaper deal elsewhere. Many people can save 100 euros every year.
4) Pay off your loans ASAP
If you want to improve your financial wellbeing, your focus should be on paying off smaller debts that you have.
Be aware that if you pay it off early, larger debts like a mortgage will be fined.
As you put your budget together, you may find that you have money to spare every month. Why not skip a meal every month and invest the money saved in paying off a debt. Small decisions like this add up quickly.
5) Budgets are important
Unless you’re bringing in more money than you could possibly spend – you’ll need to budget a budget to keep your finances healthy. If you don’t have an eye on your finances, it can easily add up without you even realizing it.
So how do you set up a successful budget?
Well, there are two steps – set the budget and stick to it.
Step 1 – Go through your finances with a fine comb. Take a look at what you make, what your most important expenses are and what else you are spending money on.
Add up all of the money you have to spend each month (on bills and debts) and then see how much money you want to save or additional money to put into your debt. Subtract those two numbers, how much money you make, and you have your pocket money for the month.
Step 2 – If you are worried that you will not be able to meet your budget. Try the money envelope technique. Withdraw cash for the money you need to spend for the month. Divide the money into envelopes for expense categories (food, drinks, etc.). Then only spend cash for the month. When an envelope is empty, you don’t spend anything.