5 tips to improve your financial wellbeing

Jun 1, 2022 | Budgeting, Wealth

In these ever-changing and uncertain times in society, there has never been a greater emphasis on our health and wellbeing.

However, there is a crucial element that is often overlooked – our financial wellbeing. When addressing our overall health, it is essential that we also look at the responsibilities and stressors that come with managing our finances.

According to the Organisation for Economic Co-operation and Development (OECD), the average Australian household finds themselves in debt around 203% of their net disposable income, ranking us fifth worldwide behind countries such as Denmark and Norway. In this debt race, the further away from first place we come, the better!

With little education around budgeting and responsible spending, especially among young adults, it can be easy to fall into an unhealthy financial position. Yet, it may be comforting to know there are a range of basic strategies you can implement into your daily lifestyle to keep on top of your finances, all while positively contributing to your own health and wellbeing.

1. For the average Australian, it is essential to know where your hard-earned cash is truly going—spending $30 per week on coffee? It is sometimes easy to blur the lines between our needs and wants, so creating a structured budget to implement weekly is a great place to start. The 50/30/20 budgeting method assigns half of your earnings to needs, such as rent, food and bills, another 30% goes towards wants and leisure (an occasional latte from your favourite café), leaving the remaining 20% to be distributed between debt repayments and savings. Implementing an organised, non-negotiable budgeting system will create a solid foundation for managing your money.

2. Another creative way to manage your debt is to map out a financial liabilities’ hierarchy or debt pyramid. Jot down your current debts and place those with the highest interest rate at the top, much like your credit card. Then, make your way down, assigning debts such as mortgages, student loans, car loans etc., into their rightful positions based on interest rates or fees.

3. Beware of apps and programs allowing you to ‘buy now, pay later’, such as Afterpay or ZipPay. While easy to use and usually requiring no more than a few taps, these payment methods can quickly plunge you into financial despair. Miss one payment? You will likely cop a late fee, then another, and another, making it a tough cycle to break. The bottom line here: Don’t spend money you don’t have.

4. Much like that assignment you said you would do yesterday, or that pile of laundry that has been staring at you for days, it is easy to leave bills and repayments to the very last minute, or even worse, until they’re overdue. Allocate an hour every other week to sit down, open those bills, review any owing repayments, and act accordingly.

5. Lastly, consider speaking to a professional! Investing time into your financial situation and wellbeing is essential to a well-balanced lifestyle. A financial adviser can give you realistic, well informed, and knowledgeable advice specific to your individual needs, and help set you up with skills that will last a lifetime.

Proactively managing your finances is the very best way to boost your financial wellbeing, lower stress, and keep you feeling your best during these uncertain social and economic times.

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Financial Advice services are provided by Insight Financial Partners Pty Ltd T/A Insight Wealth Perth as a Corporate Authorised Representative of
Australian Unity Personal Financial Services Limited (ABN 26 098 725 145), AFS Licence no. 234459.