When have you reached financial wellness? When money is no longer controlling you.
Money is such a big factor in our lives. We need it to survive and thrive, but it should not come at the cost of your mental health and wellbeing.
Being in control of your money means that you decide how you spend your money. You put your money to work and not vice versa. You do that by being conscious of how you spend your money. People who are conscious of their spending often incorporate budgets and track their spending to ensure that they are telling their money what to do.
Here is a list of items that promote financial wellness.
If you have at least 5 of these in place then you are well on your way to achieving financial wellness.
- A Debt Reduction Plan
Organize your debt either by highest interest to lowest or by amount owed smallest debt to largest. Begin throwing money at this debt one by one. Any extra money coming in should go to the debt until you are debt free
2. A Fully Funded Emergency Fund
Six months of living expenses in a liquid high yield savings account is what is best practice these days. This money should cover essential items like home, utilities, health, food, and transportation needs
3. Have written financial goals and a plan
There should always be financial goals and a plan in place. They are your why. Why you make the choices you do when it comes to how you spend your money. Without financial goals and a plan you just live for the moment. Eventually, that lifestyle is not sustainable.
4. An abundance mindset
You believe that you are worthy of all the money that comes your way and you are grateful for all of it. You don’t question why you or reject it.
5. You have a separate account just for you if you combine finances with your partner
You need to know that you will be okay no matter what. This is not a secret that you keep from your partner. They should have an account just for them too.
6. You have joint accounts for bills and other savings goals with your long term partner
This will help keep you aligned with your values as a family. When you accomplish goals, you celebrate together.
7. You plan for your future
You automate money to your retirement and investment accounts monthly. You have a plan for your kids. You are constantly looking for ways to invest and put your money to work.
8. You have a system in place to review your finances regularly
When do you review your finances? Daily, weekly, monthly? How do you stay consistent and accountable?
9. You invest in yourself
Spending money on learning and well-being is important to you. You set money aside for these things because you know that your life will be better as a result.
Reaching financial wellness is the halfway point to reaching financial freedom. Financial freedom is when your assets fund your lifestyle. You no longer have to work for a living. You work on what you love whether it pays or not.