“Financial wellness” is one of those phrases that means different things to different people, so let’s start with our definition. At Kasheesh, we believe financial wellness is the ability to:
- Spend your money wisely
- Manage your credit and debt
- Build both short- and long-term savings
- Plan for both known and unexpected costs that may arise
There’s no one-size-fits-all approach to financial wellness, and your definition could look different from ours. Overall, if you have a solid handle on the four aspects we mentioned above, you’re likely on the right track.
Get to know the 4 areas of financial wellness
If you’re not on the right track just yet, that’s okay — we have your back. Here are four areas of your life that you can think about to see how financially healthy you are.
Area #1: Spending
Keeping track of what you earn and spend every month is a valuable and healthy habit. If what you spend is less than what you make, you’re in good shape. If it’s not, it’s never too late to adjust. You can cut down on spending in small ways, such as canceling subscriptions you don’t use or scaling back on small purchases that add up quickly (like takeout for dinner every night).
Area #2: Saving
Unfortunately, financial emergencies are bound to happen. That’s what savings are for. When you build your savings, you’re basically building yourself a financial safety net. If you review your spending and find you have some extra money every month, try putting it in a savings account so it can earn interest and continue to grow — no extra effort necessary.
Area #3: Debt
Using credit cards or taking out a loan to pay for your car isn’t a bad idea — as long as you do it strategically. Borrowing can get you a ton of cash upfront and boost your credit score, but it can also bury you in debt if you don’t pay it back carefully and on time. Make sure you spend with your credit cards responsibly, and never borrow more than you can realistically pay back.
Area #4: Goals
Do you have any short-term or long-term goals? Maybe it’s getting married, buying a house, or retiring years from now. Whatever you’re imagining, keeping that in mind and understanding what it may cost will be massively helpful in setting financial goals for yourself.