Financial Well-Being – Peace of Mind

By Navdeep Singh

• 15 November 2024 • 5 Min read

Achieve financial well-being by improving your financial wellness and enjoy a better quality of life.

Financial well-being is a state where you have enough financial security and emotional peace and have financial freedom to make choices that allow you to enjoy life.

And financial wellness is the journey to the destination of financial well-being. It is the state of being in control of your money through responsible financial behaviour, having the ability to meet your financial needs and goals. This includes higher income, savings, investments, and a safety net for emergencies like job loss or health issues. Financial wellness is finding a balance between living for today and preparing for tomorrow. Lack of financial wellness can affect your physical, mental and emotional health. You can grow your income, manage, save & invest your money for financial success & happiness by practising following key steps.

1. Invest in Yourself - Grow your Income
You are your most valuable Asset

Financial wellness is directly proportional to your earning ability & your earning ability is directly proportional to your learning ability. For that you have to invest money & time in learning consistently. Invest some part of your income back in yourself. Listen to educational audio programs, read books, attend courses, seminars & conferences.

Investing two hours in learning each day will get you to the top. Your earning ability is very much like a muscle. It can increase in strength & power year by year as a result of learning exercise. The first hour of day in morning is the golden hour. Invest your 1^st hour in reading something educational, motivational or spiritual. Read the book or study material of your field 1 hour each day before you start your work.

Ladder of success has steps. Each step is a skill. If you are not constantly moving up the ladder, you are actually moving down the ladder

2. Plan your Time – Grow your Income
Time is Money

Proper allocation of time between work, home, family & friends improves work-life balance & increase productivity at work. Invest your time wisely for higher productivity.

Time management can be achieved through self-discipline. Self-discipline is the ability to make yourself do what you should do, when you should do it whether you feel like it or not. Every day & every hour of every day you have to practice self-discipline. Practice discipline of daily planning & organising, discipline of daily concentration on highest value activities, discipline of daily learning & growth and discipline of taking time daily for the most important people in your life. The effective use of time daily will increase your work efficiency & this will result in increased work productivity & higher incomes.

3. Plan your Spending – Allocate your Income
Make a budget and stick to it

Write down cash inflows & cash outflows of every month. Cash inflows are net salary or net profit after taxes & cash outflows are your family expenses like rent, food, insurance, education & other expenses. What’s left over are your savings.

You can also use the 50/30/20 rule as a guideline for allocating your money: 50% for needs (such as rent, utilities, food), 30% for wants (such as entertainment, hobbies, subscriptions) and 20% for savings.

Avoid unnecessary expenses & save more. Declutter your physical and mental spaces, only own things that serve a purpose and add value to your life. Be a minimalist. Focus on what matters most.

4. Plan for Emergency Fund – Save for Emergency
Live peacefully in the event of financial crisis

An emergency fund is a cash reserve that’s specifically set aside for unplanned expenses or financial emergencies. Keep aside a part of your saving every month to build the emergency fund. Emergency fund helps you to meet unexpected expenses such as medical bills, house repair or a loss of income. Otherwise, the financial stress in such times can negatively affect your productivity at work & your health.

Experts recommend having at least six months’ worth of living expenses in saving account or liquid instruments.

5. Save & Invest
Saving is the plan for spending on your future

Aim to save 20% of your income every month. Saving helps you achieve your short-term and long-term goals, such as traveling, starting a business, or retiring comfortably. Keep a part of savings for emergency expenses & invest the rest of your money in diversified investments like retirement plan, mutual funds & real estate. Investing helps you grow your money faster than saving alone & also that can beat inflation.

In your financial journey follow the path of holistic financial planning. It’s about creating a path where your money works for you whether you are working for money or you have acquired sufficient money that can work for you. It’s about financial security, freedom to make choices and ultimately, peace of mind.

“There’s more to come on the subject of personal finance, insurance, mutual funds, real estate & investing. So stay tuned for our upcoming posts!”