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Five Tips to Encourage Financial Wellness at the Start of the New Year

The New Year brings new challenges, but when it comes to your finances, those challenges might require more than just a quick resolution. Financial Wellness Month is here, and it comes at the perfect time of year to reevaluate your current budgeting and investment strategies. Whether you’re a seasoned professional or brand-new investor, let’s take a look at how you can successfully manage your financial wellbeing in 2022.

The Financial Wellness Month Basics

It’s easy to feel overwhelmed when it comes to money, but if you plan ahead, your investments just might pay off. This is what Financial Wellness Month is all about: giving yourself the time and space to create a plan for the New Year. This will allow you to prepare for the costs of important necessities, plan for future expenses and spend on the extras without splurging.

Keep in mind that managing your finances doesn’t exclusively mean spending money. It can include making investments or deals and calculating your earnings. These factors affect your future and can create a roadmap for how to distribute your money in the present.

Importance of Financial Wellness Month

The benefits of financial wellness aren’t just physical. Planning in advance, and sticking to that plan, can improve your mental health by giving you peace of mind. Moreover, financial stability often leads to a happier and more well-managed lifestyle. You will know what to prioritize and how you will handle even the most unpredictable situations.

Financial Wellness and Your Employer

When someone suffers from a financial burden, other areas of their life are often impacted, including their job. Companies should educate their employees about creating well-managed financial plans to help them be their best—on and off the clock. Employers should think about all the different financial hurdles their employees’ face, from retirement plans to healthcare expenses, loans, bills, spending, and budgeting. Employers can actively seek to find the best financial services for their team and educate them on managing different expenses. Just as a business builds its revenue, it can build up its employees’ financial security as well. This mindset shift from leadership can lead to higher employee engagement and retention rates.

Four Tips for Financial Wellness

Every individual’s monetary needs and goals are different so no two plans will look alike! Below are a few tips to get started, but it’s up to you to decide what will work best for your specific situation.

1. Create a Flexible Financial Plan

Focus on developing a well-balanced financial system but don’t be worried if that system has to change over time. Make note of all the important payments, investments and deals that are due in the coming year. Create a separate section for your savings and all the future investments you plan to make. This overview will give you a flexible idea of what you can expect in the New Year.

2. Formulate a Budget

A budgeting document you update regularly with all your expenses, investments and savings can give you an idea of where your money is going. It’s common for people to run into debt because they fail to track where those extra dollars disappear to!

3. Analyze your Credit Score

Make a habit of reviewing your credit score every three months. A higher credit score means that you can secure bigger loans with lower interest rates. As you continue to handle your bills and expenses on time, you’ll be able to see your credit report improve over time.

4. Create an Emergency Fund

An emergency fund is an important element for any financial wellness plan. When you create a budget, add a section for emergency funding. Emergency funding includes things like unexpected travel, medical emergency, car repair, home repair, moving expenses, family emergency, or job loss. One should at least have three to six months of expenses set aside in the emergency fund.

5. Work with a Financial Professional

If budgeting, investing and managing your finances feels overwhelming—that’s okay! There are financial professionals who specialize in supporting everyone from individual investors to business owners to achieve their financial dreams. Consider partnering with other experts to help you make the best decisions.

Financial Wellness Month aims to educate everyone on how to manage their finances in a better way. This not only contributes to a general reduction of financial stress but can improve one’s lifestyle. If you’re not totally confident in your strategy, now is the time to start learning. Use the resources available to you and start learning. With your new knowledge in mind, you’ll be able to start making incremental steps to financial wellness and freedom.

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