When talking about holistic wellness, it’s impossible to avoid the topic of money. Financial wellness is a major factor to consider when creating a healthy, balanced life. That said, money is not the be-all and end-all, money is however a powerful tool that when utilised effectively, can be a way to give and live in a way that is wildly enriching. Read on to discover Millennials and Generation X are spending their money, see if it sounds familiar and discover the art of saving money for financial wellness…
Let’s get clear on what Financial wellness actually means. Financial wellness means learning how to successfully manage financial expenses. Money plays a crucial role in our lives and not having enough money can cause great stress and negatively impact our health and wellbeing. That doesn’t mean that having infinite amounts of money equates to health and happiness. You can earn six figures or minimum wage and suck at money! Creating financial wellness is all about how you manage your money.
Managing the money that you have, effectively- can help you to positively impact the lives of others and create a life that you love. Money is a tool that can be used for good. Money can help pay for a safe home for your family, good food, life-changing experiences, education and positively impact your community. Firstly, I wanted to touch on and look at Millennial saving habits, then share a few money saving tips that I have learnt, that could help you work towards your own financial wellness…
By definition, ‘Millennials’ are adults who came of age around the year 2000, so people born between around 1980 and the mid-1990’s AKA me! Generation X were those born between 1965-1980. According to a survey carried out by Shepherds Friendly Millennials are among the best savers in the UK with 59% saving at least once a Month. The key difference between both generations is that Millennials are more likely than Generation X to be saving for a home rather than for retirement in the longer term. The majority of Millennials do actively budget. However, a minority (35%) of Millennials are still not doing so. Millennials are more likely to save in an ordinary savings account than other types of account. Looking at the Millennials that do not save at least once a month, one 1/3 never save at all. If you’re not saving regularly or don’t know where to start, here are a few tips for beginning your journey to saving for financial wellness.
Begin With A Budget
There are so many valuable resources out there that can help you with your financial situation. You can read personal finance blogs, watch YouTube videos for inspiration, invest in literature, bank with Monzo. When turning your financial situation around it is best to begin with the basics…
- Print off 3months of bank statements and look at where your money is going. Be brutally honest with yourself. This step can bring up feelings of embarrassment and be pretty eye-opening (believe me). There’s no shame here though, you are at the beginning your journey!
- Divide your outgoings into A, fixed (like your rent, utilities etc) Fixed outgoings are non-negotiable, so if you didn’t pay them you would be either in court or homeless. Secondly list B, Flexible outgoings (gym membership, food, fun budget) these are luxuries and costs that you can chop and change at will, with minimum consequences.
- Asses where your money is actually going and address any areas that you could either improve, reduce or cut out entirely. Readdressing this month-on-month will help you to keep on top of your financial activity, to see what is working and what has to change.
- Once you’ve managed to reduce your outgoings, then start by building up an emergency fund, according to Dave Ramsey’s Baby Steps this can be around £1000. This basic amount will help reduce stress in an emergency situation and avoid the use of a credit card.
- Pay off all debt, starting with the smallest, this is referred to as the debt snowball. The snowball method helps to keep momentum going and give a sense of achievement when you gradually pay off each debt. Alternatively, you can start with the debt with the highest interest rate.
- Once you’re in a position to redirect the money you were otherwise paying out to your debts, begin saving. Automate the payment into your savings account at the start of each month.
- Have a set goal and intention for your savings. If you have a “why” then you will be far more likely to succeed. Maybe your “why” is saving for a house deposit, then think about that every time you want to spend your money, which would you rather, new shoes or a house deposit? It takes a certain level of self-discipline, but you can do it.
If you’re finding that your regular job isn’t giving you the financial fire power that you require to achieve your goals, you may wish to improve your financial wellness with a side hustle. Saving money isn’t easy and it does require learning the art of saying no, occasionally. However, you will find that with a good basic budget, that your financial wellness will improve over time and help you to get to your saving goal.