Adulthood is expensive. If you weren't born into wealth and have a tough time maintaining financial wellness, this article is for you. It doesn't matter what age you are; moving towards responsibly managing your finances is always a step in the right direction. And if you are on the journey to being physically and mentally healthy, managing your financial wellbeing can be just as important.
So, whether you are preventing future problems or undoing past ones, it's best to start at square one when endeavouring to manage your financial wellbeing.
Regulated cash flow
One of the easiest ways to start is to manage your cash flow. A reliable income is the first step here. Not everyone can just 'get a job', let alone a set, full-time job. If your current income varies and you are still in the job-hunting process, the next best thing you can do is manage your expenses.
We will get into budgeting next; however, let's consider what constitutes an expense worth cutting out. Some of the best bad habits to cut out include buy-now-pay-later schemes and reliance on credit cards. A great way to stop yourself from utilising these services and overspending is to adopt the mentality that if you can't pay for it in cash, then you cant afford it.
If you already have a pretty severe spending addiction, it may be time to seek some help from a professional, in order to see the desired change. Whilst, these early years of your life are about having fun, you also should be aiming to obtain a good credit score so that when your future lender requests a credit check, you will be on track for home loan approval.
Budgeting skills
The next piece of the puzzle is a well planned and maintained budget. Your budget is technically working if your expenses aren't exceeding your income. However, you can do better than that. If you are still living with your parents, this may be as simple as budgeting to save most of your paychecks and spend whatever is leftover on leisure. However, if you rent and pay your bills, your budget will be slightly more intricate.
A great way to manage this is to set up an excel spreadsheet or two with all of your income, expenses and savings marked out. This makes it easy to see exactly where your money is going, allowing you to make the required adjustments should you realise you are paying far too much in a specific field.
For example, you might realise your car is good, but it costs you far too much in fuel. Therefore, it might be wise to swap for a vehicle with better fuel economy. Using a spreadsheet and doing some basic calculations is also a great way to see exactly how your (perhaps unnecessary) daily expenses stack. Thereby identifying a habit worth quitting, and taking the steps to do so.
Savings and emergency funds
Finally, you want to ensure you are putting enough away to have more freedom in the future and to protect yourself should an accident occur. This is especially important if you live in a disaster-prone area or country without free healthcare.
The adage is 'pay yourself first'. This is entirely true. Your bills can wait; the first thing you should do once you get your paycheck is put some of it away. It might not be a huge amount right now, but this is an excellent practice to adopt. When your paychecks increase as you move up in the world, you might be able to save more. But, for now, the process of building the habit is what is most important.
Beyond this, it's a great idea to set up what is known as an 'emergency fund'. This is a separate account from your everyday savings account, into which you put a smaller amount. It is only to be used should you encounter some form of emergency. And even if you only deposit a tiny amount, it will build up slowly and provide you with a safety net to protect your savings account, should you require it.
Of course, these are just the first stepping stones in the path to sound financial wellbeing. Further research will be your friend now that your mind is ticking. However, to recap, it is vital to consider where your money comes in and where it goes out and to start implementing healthy financial habits that will snowball into positive future outcomes.
