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Embracing financial wellness is all about managing money in a smart, healthy and productive way that fits one’s lifestyle and personal goals – with little steps making a BIG difference.
The importance of maintaining physical and mental health is a topic that’s discussed constantly in our world today. After all, improving overall well-being leads to happier individuals and stronger communities. But what about the need for financial wellness? It’s more crucial than you might think. Here’s why:
In a nutshell, building financial wellness – for both now and the future – leads to getting ahead and living the lifestyle that’s best for you. By understanding the basics of responsible money management, making smart choices and creating healthy habits, you can reach your personal financial goals while enjoying comfort and peace of mind for years to come.
The best part: Pursuing financial health doesn’t have to be complicated. It essentially boils down to understanding how to manage your spending, saving and investing based on your circumstances.
Maintaining a healthy budget is something that benefits everyone, regardless of income. By managing your spending and savings in a way that matches your short- and long-term goals, you’ll be in a better position to experience financial wellness. Basically, the idea is to spend less than you bring in each month, so you can build your liquidity. The ultimate challenge, then, is to live within your means.
It helps to start with the basics. Figure out how much cash you need for regular monthly living expenses, such as payments toward rent, gas, groceries, utilities and other fixed costs. From there, you can track your spending by using a handy spreadsheet, budgeting app or online banking.
Once you lay out your expenses, you can begin to compare how much you’re spending versus how much you’re raking in each month. Consider looking for areas where you can trim some fat, such as that streaming service you rarely use or that non-essential food-delivery service that temps you occasionally. And to make monitoring your spending even easier, you can use this helpful calculator:
In terms of surprise expenses – like a sudden hospital visit, broken furnace, unexpected job loss or something similar – it helps to be prepared, financially. As the old saying goes: hope for the best, plan for the worst. That’s where it helps to have an emergency fund in place. It’s a safety net against financial setbacks, and will help keep you afloat when hit with unplanned expenses.
While it’s important to plan for the worst, don’t forget how fun it can be to save for the best! In other words, once you’ve budgeted for regular and surprise expenses, you have the green light to take what money is left over and put it toward something awesome.
Whether it’s that dream vacation, a fairytale wedding, house projects, paying for college or anything in between, it pays to save for your life goals. Once you have a budget in place, the easiest way to go about this is by setting up regular automatic transfers from your checking to your savings. From there, you can say bye-bye to manual processes and hello to convenience as your dollars build up over time.
A great way to build up your finances without even thinking about it is by using Simply Save. Easily harness the power of your Gate City Bank debit card to round up transactions and have the extra money deposit into an approved account or loan of your choice!
At the same time that you’re budgeting and saving for your personal financial goals, it also helps to take proactive steps to work down debt as much as possible. And while debt is a normal part of life – whether it’s a mortgage, credit card, student loans or anything in between – it’s most definitely possible to have too much debt. It can be stressful, the exact opposite of financial health.
When working down debt, there are two common routes to take: pay off the highest rates first (the avalanche method) or the smallest debts first (the snowball method). From there, you can address any additional debt by making smaller payments. Another option is to consolidate debt into one convenient monthly payment.
Ultimately, when deciding how to move forward, it's important to calculate your debt-to-income (DTI) ratio – that is, the percentage of monthly income used to pay off debt – because loans with a higher DTI ratio typically come with higher interest rates. The moral of the story: chip away at debt and (if possible) avoid taking on new debt, at least until you’re in a manageable place with your existing obligations.
Smart investing is another way to build financial wellness. Start by talking to a knowledgeable professional who can walk through a financial-planning strategy that works for you. It also helps to not get the jitters during turbulent economic times. Downturns in the midst of volatile markets happen, but they’re often temporary. If you can be patient and stay the course, it can pay off big time.
And similar to how people tend to focus on what investments to pursue in the here and now, we don’t always think about building up funds for our sunset years. Indeed, reflecting on retirement is crucial when it comes to establishing overall financial well-being. It helps to know answers to questions such as:
Again, when anticipating the years ahead, it’s important to think about what lifestyle you’d like to have, and sitting down with a helpful financial advisor – one who’s easy to reach, can answer your questions and loves to help you navigate complex topics – is a wise move. Plus, the sooner you start planning, the more time you’ll have for your money to grow.
Navigating the complexities of personal finance can be daunting. That’s why we at Gate City Bank are here to provide guidance and support every step of the way. Feel empowered to reach out to us with questions; our team of knowledgeable professionals is dedicated to helping you make informed financial decisions and access personalized solutions tailored to your needs.
Achieving financial wellness is anything but impossible. By following the simple yet powerful tips we’ve laid out in this article, you’ll be well on your way to financial prosperity – and a better way of life.
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