Why is Financial Wellness
So Important for Employees?
Financial wellness may sound like a buzz phrase, but it’s a crucial part of a person’s wellbeing. If you want to have the freedom and security to do what you want without spending your time stressing about money, you have to start thinking about financial wellness.
The truth is, we all should be concerned about financial wellness, especially in a time of economic upheaval where the economy seems to be shifting under our feet at any given moment.
In this article, we’re going to present you with some healthy financial habits that work well with your company’s financial program.
Start by Setting Up a Budget
It’s so important is to avoid the danger of a shortfall: You don’t want to put yourself in a position where there’s more money going out than coming in. No matter how much you have now, if such a trend continues, you’re eventually going to run out.
The best solution to the “spend-more-than-you-make” problem is to set up a budget. Identify and categorize your expenses:
Add it all up and see how it stacks up against all your sources of income to see where you stand.
Create an Emergency Fund
Emergencies happen to everyone, and they’ve happened to a lot of people during the pandemic. So, it’s vital to have a cushion ready if and when one happens to you.
That cushion doesn’t just involve stuffing money away in a mattress or a savings account. Your emergency budget can include the money you pay for insurance, for example. Decide what kind of insurance you need and what you can do without. This can vary depending on your situation, your risks, and what you can afford to pay.
Car insurance is mandatory in most places: Find out what’s required in your state and what you want or need to feel comfortable on top of that. Consider premium costs, deductibles, and how much coverage you feel safe purchasing. Read the fine print to get the best deal possible.
Also, consider bundling different types of insurance, like auto and homeowners, to save money — but be on the lookout for unnecessary overlaps. You don’t want to pay twice for the same coverage.
Stay on Top of Maintenance
Whether it’s personal maintenance (going to the gym, getting a good night’s sleep, cutting down on carbs/ caffeine/ alcohol, etc.) or maintaining the machines you rely on, don’t overlook the necessities.
Illness can quickly drain your finances through lost work and medical costs. Similarly, if you don’t take care of your computer and your car, you can wind up in a different world of hurt. Look into antivirus programs, firewalls, and other electronic means to protect your computer, and be on the lookout for scams.
When it comes to your car, check your tires to be sure they’ve got enough tread, are properly inflated, and aren’t wearing unevenly. Learn to look for warning signs. Have your car serviced on schedule; rotate your tires; change the oil, filters, and spark plugs when called for. This will keep your car running more smoothly.
Build Up Your Credit
Having good credit can be a godsend if you want to make a significant purchase like a house or a car or need a fallback in a time of crisis. On the other hand, having not-so-good credit can create difficulty you may not have anticipated. Loans will be harder to get, and you’ll pay higher interest rates if you obtain them. With the rise of fintech advances such as point-of-sale financing, solid credit will continue to be even grow in importance.
It’s a good idea to know where you stand, credit-wise, and you can find out by ordering a free credit report. If your credit isn’t great and you need to re-establish it, one option is depositing a fixed amount that can serve as your credit limit for a secured credit card account. That way, you won’t overextend yourself, you’ll have a fallback, and you’ll be building your credit, all in one go.
On a Final Note
Financial wellness isn’t just a buzz phrase; it’s something that can make your life a lot easier and your goals much more attainable. These are just a few ideas on how to start down the road to achieving it. Once you do, you’ll never want to go back.
By Ann Lloyd, Student Savings Guide