How Can Financial Health Be Defined & Applied?
When it comes to self-care, it’s important to take a cohesive approach. Many people believe that this is three-pronged. First, you need to take care of your mental health above all. Some may consider that spiritual health may be the first or second wall in the house of health you hope to build, but even those who do not have a particular faith will likely feel that spirituality of some degree, even if that’s just being kind in life, is essential. The third wall of this structure is physical health, because while not necessarily as important as mental health, is an important contributor to it and essential to get right.
But it’s unlikely that you’ll build a house using only three walls. So what could the fourth wall be? As far as we’re concerned, financial health should be considered for this slot. Your money can be considered a lifeblood, important to flow and structure in the right way throughout your life. So how can financial health be defined and applied in this context? It’s worth asking these questions to spark conversation.
It’s here that we hope to start that conversation:
Take Care Of Number One
‘Take care of number one’ can seem like such an outdated theory. This is because for the most part, we all need to help and rely upon other people in order to enjoy a life worth living, or to make the basics of survival achievable. If you were stranded on a desert island with a group of people, working with them, not on your own, will certainly lead to a higher chance of success.
Yet when it comes to your finances, taking care of number one means being able to support yourself before you can support anyone else. Of course, you may define ‘number one’ as a family unit. But the truth is that before you lend money to people, or donate to causes being crowdfunded, or before you invest in an opportunity, you should always be sure that you have your own finances carefully considered and managed. Every purchase not contributing to your direct livelihood and daily maintenance should be considered and budgeted beforehand. This simple trick can help you avoid being reckless with your money, and it should be understood and practised from a young age.
Read The Small Print
Reading the small print of anything you purchase, or the legislation surrounding anything you invest in can be a valuable use of your time for a variety of obvious and quite clear reasons. What matters is the ability to be aware of the contractual obligation you sign onto when making a deal.
For instance, you may think that a purchase is subscription-based and can be cancelled every month, only to realise that it’s actually a monthly payment for a twelve-month contract that comes with a relatively harsh cancellation fee if wishing to leave early.
This can be the difference between something that is affordable for you, and something that may tie you down or cause real financial havoc. Additionally, an opportunity that may seem like a great way to save cash, such as financing a car, may come with many different interest terms and requirements that actually leave you paying much more than if you had simply saved and purchased the car brand new from the lot. While finances must always be measured by the life you need to live and the savings you have right now, ignoring the small print is a fool’s errand.
Be Careful With Investments
Be careful with the investments that you make. It’s important to understand that investments are not guaranteed returns, or that they may come later than you imagine. For instance, it’s not uncommon for people to help a friend out with a small personal loan from time to time so that they can get their dream started or to help structure their small business, only to have this money go ‘missing,’ leading to small claims court and the loss of a friendship.
However, this is simply good practice no matter what you do with your cash. For instance, the insight necessary to use a trading advisor that has been proven time and time again can help you trade with confidence using platforms and in markets that you may have struggled with in the past, or that you may be new to. This is an investment in an investment, a mitigative tactic used to help you protect yourself when getting involved in this world.
Budget Your Paycheck
Everyone receives income of some kind, in varying amounts. Whenever this does appear in your account, or when you’re expecting a payment, it’s important to budget that money ahead of time. First, saving 10% of your income is important for emergency use, and this can be tailored depending on the amount you receive. This way, you’ll always be hedging your expenditure in the best possible way.
Budgeting your paycheck is important no matter if you run a business, or are just starting out as a professional. The more you’re able to diversify your finances and ensure at least part of your money management is segmented in safety, the more comfortable you will feel.
Utilise Price Concessions
There are many people who will not browse sales or look through coupon books because they feel it’s a waste of time. Of course, that’s more than justifiable and their decision to make. However, it can also be that many other price concessions are worth learning. Learning to negotiate, for instance, may get you a better deal on a car than you are being quoted for it. Waiting until an upcoming promotion is here so you can bulk buy for the holidays, or sometimes heading to wholesalers to save money on your long term grocery shopping can certainly be a worthwhile use of your time.
With this advice in mind, we hope you can define and utilise financial health basics to help you grow and manage your money in the best manner possible. After all, clean financial health is the least you deserve.