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Five ways to achieve financial wellness


Financial wellness is about being in control of your financial position. It’s not just about how much money you have, it’s about how you manage your money and the decisions you make with it.

In today's fast-paced and consumer-driven world, it's easy to get caught up in a cycle of spending without considering the long-term consequences, ultimately leading to feelings of anxiety. We explore some of the steps you can take to change your mindset and adopt positive money management strategies, helping you to reduce stress and gain control of your finances.

Understand budgeting

Having a budget is the first step to improving your financial wellness. By adopting a systematic approach to managing your finances you give structure to your spending. This means you’re more able to keep a tighter grip on any over-spending, as well as having the opportunity to highlight where you can make savings.

Budgeting also helps you set financial goals and work towards achieving them. If you’re aiming to clear debts, save for a house deposit or build a retirement nest egg, a well-structured budget can keep you on course and help you make progress towards achieving those aspirations.

Whether you use a simple spreadsheet or an online app that tracks your spending, by giving yourself a clear overview of your finances you can help to alleviate any anxiety you might be feeling.

Find the best deals

One of the most effective ways to maintain your financial wellness is to ensure you’re getting value for money on anything you spend your hard-earned cash on. Before making a purchase, take a moment to compare prices from different retailers or online platforms. Price comparison websites and browser extensions can help you quickly find the best deals and discounts. You should also consider using cashback and reward programmes to earn back a portion of your spending, further boosting your savings.

Avoid emotional spending

Emotional spending can be a significant drain on your financial wellness. Before making an unplanned purchase, take a moment to pause and assess whether it aligns with your financial goals and your budget. Ask yourself if the item is a genuine necessity or if it's driven by a fleeting emotional impulse.

By developing mindfulness around your spending habits, you can help identify the triggers that sometimes influence your spending and put yourself on the path to a healthier money mindset that allows you to make more rational choices.

Set short-term and long-term savings goals

Striking a balance between short-term and long-term savings goals is crucial for achieving financial wellness.

Short-term goals serve as the immediate stepping stones towards financial stability. They offer tangible rewards and can help build discipline and accountability. Whether it's saving for a dream holiday or paying off a debt, these goals instil a sense of achievement and pave the way for more ambitious financial targets.

Long-term savings goals represent the foundation for building lasting wealth and securing a comfortable retirement. One of the key benefits of long-term savings planning is that you can take advantage of compound interest. By starting early and remaining consistent, you have the opportunity to see your savings grow exponentially over time.

Build an emergency savings fund

An emergency savings fund is a dedicated sum of money set aside to handle unexpected events that life may throw your way. It acts as a financial safety net that helps to relieve the stress of any unexpected challenges, providing you with a buffer in case you lose your job or encounter any unforeseen expenses without having to resort to borrowing.

A good rule of thumb is to aim to build up at least three months of living expenses in an emergency fund. This amount ensures that if you experience a job loss, you'll have enough funds to sustain yourself for a few months until you secure new employment.

To find out more about how to build an emergency savings fund to help improve your financial resilience and ultimately your financial wellbeing click here: https://www.paragonbank.co.uk/blog/emergency-savings-fund

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551