Do you feel overwhelmed when it comes to your finances? Don’t know if your income is enough to cover all of your outgoing costs? Do you check your balance on the regular, or are you more of an ‘avoid checking at all costs’ type of person? These questions are a good starting point when it comes to determining if you are what we call ‘financially healthy’.
And don’t worry, if your answers aren’t what you would like them to be (e.g. you have no idea if your earnings actually cover your outgoing costs) then now is the perfect time to start your journey to becoming financially healthy!
Being in control of your finances (or not) can have a huge impact on your mental wellbeing. Struggling to pay your bills or wondering how you are going to pay for your outgoings can be hugely stressful and will more often than not start to impact other areas of your life.
It can be quite overwhelming and seem daunting to start this journey, but we promise you – it is so worth it! Your future self will thank you for it and the feeling of being in control of your finances is amazing – the freedom!
We’ve tried to simplify this for you with our ‘checklist’ below of signs your are in control.
Checklist to see if you are financially healthy
(and most important!) You regularly check your finances
This could be as simple as checking your account balances regularly or it could be creating a budget and checking this budget is working on a monthly basis – has your insurances increased? Have you got a new regular payment that you haven’t included in your budget?
You spend less than you earn (income is more than your outgoings)
Or at least have sat down and looked at your incomings vs outgoings, and have a plan of attack to reach your goal of spending less than you earn. Its just like the saying “What goes up most come down”, what goes out must be coming in in the first place! Quite simply, if you are living beyond your means then you will really struggle to get ahead.
You have an emergency fund for unexpected costs
We all know that unexpected costs can occur such as new tyres on the car, your pet got sick and you now have a vet bill to pay for, but a lot of people haven’t allowed for these costs and find themselves in a difficult situation when it comes time to pay that bill. Having a separate account that you put a weekly/fortnightly/monthly amount into will help to ease that pressure when the unexpected happens.
You think about your future & have goals
Having grand ideas of going on that yearly holiday, or buying a first/new home is all good and well but if you don’t have the plan behind it, actually achieving it can often seem out of reach. Sit down and think about what it is you are wanting to achieve, how much it is going to cost and when you would like to achieve it is the first step and work backwords from there. For example, if you would like to go on a holiday in one years time and its going to cost $2,000 then that would mean $39/w savings. Ask yourself – is that affordable? If it is – great! Start saving! If its not, then re-evaluate the goal and adjust it to suit. The holiday may happen in 18 months rather than one year, or the holiday may be smaller / closer / more budget friendly.
You’re debt free (or have a plan to become debt free)
Remembering there is ‘good debt’ (for example, a student loan, or a mortgage) and ‘bad debt’ (hire purchases, after pays, credit cards) – the bad debt can really hinder your chances of getting ahead. Its short term and high interest. Check out our blog about short term debt here.
You’re committed to growing
“Noone is perfect and everyone makes mistakes”, now repeat that! As long as you are willing to learn and grow then we think you will nail it. Own your mistakes and learn from them (a mistake isn’t a mistake if its repeated!). Also, don’t be afraid to ask questions. There is bound to be someone you know who is, or has been in the same position you and sharing your ideas can help you move in the direction you need to be.
So just remember, you don’t have to be on a high income to be financially healthy. If you can tick off the above checklist your level of income becomes irrelevant – and your physical, mental and therefore overall wellbeing will undoubtedly improve.