Top 5 tips for managing financial wellbeing by ikigai
Financial self-care is about learning what helps you feel in control of your money, being able to assess and plan so you can reach your goals and protect your boundaries. It can help boost your financial resilience and ensure you have a positive relationship with your money, rather than a stressful or emotional one.
Here are 5 top tips to help you manage your money:
1. Have a budget
Practicing financial self-care starts with knowing your situation – taking the time to understand what you have in terms of incomings and outgoings, what you have in savings, and what debts you have as well. Knowing this can help you budget which in turns helps you take control of your money and plan for what you want.
By understanding where your money goes, you’ll also be able to cut down on things and allocate more towards the things that you actually value and enjoy.
2.Build an emergency fund
Money gives you security. Having a financial cushion to fall back on allows you to take more risks and offers you a level of freedom in your life that you wouldn’t otherwise have.
It allows you to quit that job, change that relationship, pay to fix your car or your roof or replace your fridge without worrying. And it puts you in control of the way you live. It is more than just money in the bank. It ensures that you have options even in turbulent or uncertain times.
Based on your lifestyle your emergency fund should have the equivalent of three to six months’ living expenses.
3. Spend mindfully
Spending mindfully means thinking about why we are making certain financial decisions. By adopting a more intentional approach to these decisions, we become aware of the difference between our needs and our values — and start consciously spending in a way that makes us feel happier and more purposeful. It also has the added benefit of helping you save or invest more so you can grow your money at the same time. There are a few steps you can take to become a mindful spender:
- Pause before purchasing
- Turn off one clicks
- Schedule splurges
- Play the waiting game
- Try the No Spend Challenge
4. Make a debt repayment plan
If you have any debt, it’s worth considering making a repayment plan. We suggest starting with the one with the highest-interest and then moving on to lower interest ones. To pay off low interest debt you can use the snowball method:
- Rank smallest to largest
- Pay minimums
- Pay as much as you can of smallest debt until paid off
- Apply that payment to next smallest
- Repeat until you're debt free!
5. Start investing
Once you’ve completed all of the above you can start thinking about investing your money. Investing not only protects your money from rising inflation, but it can also help you grow your wealth and achieve financial goals that normally require quite large amounts of money, like retiring early or building or buying the house of your dreams.
With ikigai you can invest in fully managed, globally diversified portfolios suited to your preferred risk level. You also have the option to put your money in an ISA account which has a range of tax advantages to help you keep more money in your pocket.
You can learn more about ikigai here.