How can you improve your financial well-being?
October 10, 2019
We talk a lot about the importance of looking after our physical and mental well-being. What is less talked about is how to improve your financial well-being. Regardless of your income, everyone has to make decisions on a daily basis on how to manage their money. It is easy to fall into a rut of living for pay-day or sometimes using your credit card to bridge the gap in between. The decisions we make are influenced by our financial capability and the impact of those decisions is seen in our financial well-being.
Last year, we commissioned Ireland’s first report on financial well-being and the results were very interesting. We found that the majority of people are doing fine day-to-day, however just over half of the people we surveyed have little resilience against financial shocks such as sickness, redundancies or other unexpected expenses.
On World Mental Health Day, you can make changes to improve your financial well-being. Here are some ways to start:
- Take a snapshot of your current financial situation
Take a look at your current financial situation by working out how much money you have coming in and going out. To help you, you can download our financial health checklist. Once you know where you are, you can work out where you want to go.
- Identify your financial goals
Many people make a list of goals. They may be short-term, like saving for a holiday, medium-term, such as saving for a house deposit, or longer-term, like saving for retirement. If you are saving for longer-term goals such as retirement, you should consider getting independent financial advice.
- Prepare a 12 month plan
Some months can be more expensive than others, and preparing a 12-month plan in advance will help put some structure on your finances.
- Pay yourself first
Taking the time to look at how you spend your money and where you can possibly make changes. Saving even a small amount will get you into the savings habit and help you to start building up a small nest egg. We have a regular savings money tool on our website that shows you the various savings accounts available and the interest rates on offer.
- Prioritise your debts
If you have outstanding debts, you should focus your efforts on clearing these before you prioritise saving as the interest you’ll pay on debts is considerably higher than the interest you will earn on savings. This may mean that your savings plans have to go on the back burner for a while, but the short term pain of paying off your debts will put you in a better financial position to start saving in the future.
- Review your plan.
It is a good idea to review your plan regularly and ensure that you are on track to meet your goals. Regularly reviewing your plan may also help you to make further savings if you can avail of better rates and deals. This might sound like a lot of work, but our money tools do the hard work for you.