The last few years have been incredibly rocky, financial-wise, with pandemics, stock markets on the rise, and the cost of living crisis. So it is easy to imagine that many households don’t feel as financially fit going into 2023 as they might have felt in previous years. But that isn’t to say it is all gloom and dark clouds. There are some habits and tips everybody can do, whether you are looking to become financially healthier or if you are already economically healthy and looking to maintain it.
Do You Consider Yourself Financially Healthy?
There are usually three sectors on the financial fit scale. Some households are incredibly healthy or fit, others that are coping, and those who are struggling. The question is, where do you fall?
Are You Currently Fit?
Do you find that you are currently living within your means and that you easily get from one month to the next covering all expenses while still being able to save money and plan for retirement? In that case, you fall within this category. Households that are financially fit could look to make minor adjustments to increase or optimise their finances further.
Sometimes minor suggestions might be to just re-evaluate all your expenses and check if there is anything that isn’t applicable anymore. For example, maybe you have a gym membership, but no one is going, or perhaps you are subscribed to software that you no longer use. A top tip includes making use of the ‘family shared’ options for accounts such as Amazon, PrimeTime, Spotify and Netflix. Other changes might be if you find that you have substantial savings – maybe chat with a professional to see if there are benefits to paying off a mortgage or loan quicker.
Are you just making it?
If your expense amount is almost the same as your income amount, you might need to take a hard look at your budget. The issue with coping is that, occasionally, life throws a curveball at you, such as a car breaking down or the boiler must be replaced. To handle situations where a large sum might be required, you will need to alter your budget to allow for savings for these days.
Look to chat with a financial advisor who can provide some perspective on your financial situation. Set goals to allow you to start saving as soon as possible or to pay off any loans or mortgages quicker. Look at all your expenses and determine which are important and which are luxurious.
Has ‘struggling’ become your middle name?
If everything has gotten out of control, you first need to get hold of a professional that can work out a path for you. The worst thing you could do is continue to take out loans and borrow money, not knowing when you can pay anything off, just hoping for a miracle. The best thing you can do is get support from a professional in the industry who can assist you, provide advice and show you the path to getting out of debt.
This path will not be easy, and depending on your situation, it might take anything from a few months to a few years, but the point is that once you have that plan, stick to it. Reassess every few months, be smart about your choices and understand there is no quick fix.
Being financially fit isn’t about a high-end job or getting an enormous inheritance. It’s about your habits and understanding your situation and what you want to be in. Chat with a professional who can provide tips and advice for your specific situation.
