Financial wellness: Protect your ££ as lockdown eases
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New evidence shows that women are at greater risk of falling incomes than men. 48% report a decrease in income in the past month.
Now is the time to take a look at your financial wellbeing.
New statistics have shown that women are “more affected by the pandemic than men” – that is, the number of women working five or less a week has doubled in the last quarter, reports the Center for London.
When pubs, restaurants, rooftop bars, and gyms reopen it is normal to be concerned about the amount of money you might be spending. Months of lockdown weren’t particularly fun, but they were good for most when it came to saving money. With society largely closed, you’ve saved the cost of your morning pret coffee, after work all bar one drinks and weekend meals – it all adds up quickly.
“You’ve gotten into the routine of cooking at home instead of restaurants, and exercising outdoors versus spending at the gym. Our spending has changed in a million ways, ”shares Brittney Castro, Mint Certified Financial Planner. “Reconsidering your old spending habits after a year of major lifestyle and routine changes can be troubling to some people.”
We spoke to Castro and asked her advice on how to deal with fear of money and protect your financial well-being when the world reopens. Continue reading.
Introduction to Financial Wellness: Everything You Need to Know
What is Financial Wellbeing?
According to the Financial Educators Council, the term simply refers to “effectively managing your business life”. The Consumer Financial Protection Bureau adds, “Wellbeing is defined as financial security and financial choice, now and in the future.”
Essentially, it’s about being rational and organized with your finances – keeping an eye on your income and expenses, and making sure that you are managing your finances in a way that you feel good about yourself and are able to manage your life with full financial freedom live whatever looks like for you.
Why is now a good time to check your financial wellbeing?
Good question. “For some people, the final year of quarantine and work from home meant having their social calendar cleared entirely, not traveling to work or leisure, and generally not spending as much money – that is, they saved more than ever previously, “she shares.
For others, however, the effects of the pandemic meant losing jobs, life changes, or emergencies their finances were unprepared for, leading to wallets tightening than ever.
Now that the world is opening up again – and with more people getting vaccinated and the economy recovering in certain cases – people are expecting to spend on social outings like they did before COVID. “If you’ve gotten into a good saving routine, or alternatively, having trouble making ends meet and feeling compelled to spend like you used to, you may feel nerve-wracking and anxious,” she continues.
Why do women need to check into their financial wellbeing right now?
The latest Snapshot of Londoners poll found that the number of women working five hours or less of paid work each week doubled between September and January.
The results showed that women were at a higher risk of dropping their income than men. 48% said their income had decreased in the last month, although income remained constant for men.
So why women? Castro says it’s because they’re often in grooming roles. “Most schools enforced distance learning and many working women had to re-prioritize caring for their children at home while also working from home with no school or daycare to help,” she explains. “This meant that women who take time off or are self-employed cannot work as much to take care of their children.”
“All of this has had an impact on women’s incomes and finances.”
Castro has some advice if this fits your current situation. “Be gentle with yourself. Schools are starting to open again, and now is a good time to review your finances and see what you can do now to get back on track. This could include rebuilding your cash cushion if you had to use it to cover a last year’s income shortage or pay off debts, ”she explains.
Whatever the case It’s always a good idea to review your financial goals and situation every year to make sure you have the best game plan as life moves on, She adds.
We’ve covered women’s unemployment before – and how you can secure your career. So read this advice in case you need it.
How can I protect my financial wellbeing? 5 tips
Most people don’t talk about how financial stress and worry affects their overall health, but it’s also very important, the expert says.
“When you make a plan for your future, you can actually feel in control and improve your mental health,” she explains.
Take a step back and use the tips below to keep up with your savings and long-term financial wellbeing.
1. Review your expenses regularly
Castro recommends doing weekly check-ins to review your budget and spending, and to track your progress to make sure you are sticking to your healthy money habits.
“Even when the world opens up and you start eating out, spending money on travel, etc., it is important to keep track of things,” she said.
Certain apps, like the Mint app, point out where you’re spending more money. This will help you assess whether there are areas where you need to call back or adjust your budget to reflect changes in your lifestyle.
2. Build an emergency fund
At all stages of life, Castro shares have an emergency (or rainy day) daily fund, which is a savings account that consists of three to six months of committed monthly expenses.
“This year has made most of us realize how important it is to have one,” she continues.
3. Automatic, automatic, automatic
One of the easiest ways to save money, and the only way Castro can do it, is to set up automatic savings contributions every month.
The expert continues, “If you do this, your savings will go up every month without you having to think about it.” Sounds like a plan.
4. Set (and review) your financial goals
This really is key when it comes to financial wellbeing.
“Ask yourself Why should you give up your financial goals just because the world opens up again?“
“It’s best to find a balance with your money,” she continues. “Aim for one that you can still stand up for your financial goals and spend some money to enjoy in your current life,” she recommends.
Do you find out that the goals you achieved over the past year are no longer relevant or a priority to you? Then it could be time to take a new direction and focus your financial goals, the expert informs. “You should reassess your financial plan with life changes (or every year),” she says. “Most of the time, it’s just about sticking to your financial goals over the long term and not changing them with every ebb and flow of life.”
5. Invest in yourself
Last but not least, you can’t prioritize your finances if you don’t prioritize yourself first.
“Prioritize self-care and include it in your budget – this has always been one of my biggest tips for clients,” says Castro. “We all need to make sure we find ways to use time and money wisely to take care of ourselves from a holistic perspective of wellbeing.”
Conclusion: “Whether it’s time to take a day trip out into the great outdoors or hire a professional licensed therapist, self-sufficiency is more important than ever and should be considered as such when setting our budgets.”