12 Ways to Improve Your Financial Wellness

February 21, 2023 9 min read

Financial wellness is more than just making money, it's about managing your money in a way that allows you to achieve your goals and live the life you want. Unfortunately, many people struggle with financial literacy and don't learn the necessary skills until they are already behind in the game, dealing with bills, debts, and financial decisions. 

Whether you're trying to pay off debt, save for retirement, or invest in your future, these 12 tips will help you achieve your financial goals and reach new heights. So grab a sports drink, lace up your financial sneakers, and let's get started!

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1) Don’t be passive about your progress

Are you satisfied with a mediocre financial situation? Think like a top athlete and strive to constantly improve your income and career to reach financial wellness. Just like an athlete, you should never be satisfied with poor progress towards your goals. 

In the game of personal finance, settling for a mediocre or bad financial situation is like conceding defeat before the game even begins. Just like a team that enters a game with a defeatist attitude is unlikely to come out victorious, accepting a bad financial situation is as close as you can get to a guarantee you’ll never reach your goals. Depending on winning the lottery doesn’t count as a retirement plan!

To be financially successful, you need to approach your finances with the mindset of a winning athlete. This means never settling for anything less than your best effort and always striving to achieve your financial goals.

In fact, the most successful athletes never settle for good enough; they always strive to be the best they can be. Just the same, to reach financial wellness, it's crucial to consistently evaluate your financial situation and seek opportunities for improvement. Whether it's increasing your income, reducing your expenses, or optimizing your investments, you should always be looking for ways to elevate your financial game.

2) Discover your unique value

What is it that makes you stand out? What skills can you invest time into that will help you increase your earnings? 

Discovering (and building on) your value is a crucial step in improving your financial wellness. It's like finding your position on a sports team - you need to know your strengths and where you can add value. Just as a coach will assess the skills of each player and assign them to specific roles, you should take the time to understand where you can excel in your career or business.

Whether you're just starting out or looking to make a change, take an honest look at your abilities and interests. Think about what you're naturally good at and what you enjoy doing. This is your "sweet spot" - the area where you can shine and make a real impact.

Once you've identified your strengths, focus on developing those skills and making them a key part of your professional toolkit. Take courses, attend workshops, or seek out mentorship opportunities to hone your abilities and become the MVP of your team. 

3) Don't be afraid to ask for regular raises 

There’s nothing wrong with being proactive about asking for raises - in fact, sometimes that’s the only way to get one. Once you’ve identified your worth and developed your skills, you are worth more to the organization. At some point, it’s only reasonable that they increase your pay to reflect your new worth. 

This is just like an MVP athlete renegotiating his contract to capitalize on his success the previous season - better performance should equal better pay!

4) Get rid of debt

Stay out of debt, or get out of debt quickly if you find yourself in debt. Debt is like a heavy weight that hinders your financial mobility and restricts your options, a lot like an injury restricts an athlete's mobility and performance.

But don't worry, there are plenty of tools and strategies to get you back in the game. Starting with your budget!

5) Stick to a budget

Make a budget; one that reflects your financial goals and helps you stay away from overspending. Then stick to it like glue. This is like an athlete sticking to a strict training regimen that reflects their performance goals. You’ll need a budgeting book or spreadsheet to keep track of your expenses and progress.

Sticking to a budget is like practicing for the big game - you need to have a game plan and stick to it. Just like a coach creates a playbook, you need to create a budget that works for you and stick to it no matter what. It may not be the most exciting part of your financial journey, but it's essential to ensure you're always in the game and not left on the sidelines.

Think of your budget as a coach that helps you manage your money and prevent overspending. Just like a coach keeps you on track to win the game, your budget keeps your finances on track to help you reach your financial goals. By sticking to your budget, you'll avoid penalties like overdraft fees and the unnecessary purchases that can throw off your game.

6) Watch your housing costs 

You should follow the 30% rule, which means that your housing costs should not exceed 30% of your gross monthly income. A great house is wonderful, but if it costs too much, it can drag you down into debt very quickly. Just like an athlete watches their diet and makes sure they consume only the right amount of nutrients to fuel their performance. Food can be delicious, but if you’re trying to achieve or maintain fitness, eating whatever you want is a fast track to failure.

Watching your housing costs is like playing defense in a game of basketball. Just as a good defender must anticipate their opponent's moves, you need to stay ahead of your housing costs to avoid being caught off-guard by unexpected expenses. Your housing costs, including rent or mortgage payments, utilities, and HOA fees, can put a strain on your finances if not kept in check.

You can think of your housing costs as an opposing team trying to score points against you. But by following the 28 percent rule, where only 28 percent of your gross monthly income goes towards housing costs, you can shut down their scoring chances and keep your finances on track. It's like playing tough defense to protect your financial basket from the opponent's attack.

By being mindful of your housing costs, you can free up money to spend on things that matter to you, like building up an emergency fund or investing in your future. So, keep a close eye on your housing expenses and make sure they align with your financial goals. Remember, in the game of finances, a good defense is key to scoring a win for your financial health.

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7) Build an emergency fund 

that can cover at least six months' worth of expenses in case of emergencies. This is like an athlete building up their endurance and strength so that they can endure long games and play through injuries.

Just like a team needs a backup plan in case of an unexpected setback during a game, you also need an emergency fund to keep you financially secure during unexpected events in life. An emergency fund is like having a goalie in place to protect your finances when the unexpected happens. It's important to set aside money in a separate account for emergencies, such as job loss, unexpected medical expenses, or unexpected car repairs.

Having an emergency fund is a vital part of your overall financial health, and it's essential to build it up as soon as possible. You don't want to be caught off guard and fall behind financially. Building an emergency fund requires discipline, but it's worth the effort. Start by setting a goal for the amount you want to save, and then make regular contributions to your emergency fund until you reach that goal.

Just like a goalie needs to be ready at all times during the game, your emergency fund needs to be ready to step in and protect you when the unexpected happens. Building an emergency fund is a smart and responsible financial move that will help you feel more confident and secure in your finances. With an emergency fund in place, you'll be able to face any unexpected expenses that come your way without worrying about going into debt.

8) Build out your retirement accounts

Accounts like your 401(k) or individual retirement accounts (IRAs) should be grown to maximize your tax-friendly growth opportunities. This is like an athlete investing in high-quality gear and equipment to improve their performance and endurance.

Building your retirement accounts is like training for a marathon. You have to put in consistent effort over a long period of time to see the results you want. Retirement accounts, like a 401(k) or an individual retirement account (IRA), are the foundation for your financial future.

Just like building endurance for a marathon requires proper nutrition and a consistent training plan, building your retirement accounts requires smart investments and regular contributions. The more you contribute and the earlier you start, the better off you'll be in the long run.

Maxing out your retirement accounts is like running faster and farther than you ever thought possible. It may seem challenging at first, but with hard work and dedication, you can achieve your financial goals and secure a comfortable retirement.

Make sure to regularly review your retirement accounts and adjust your investments as necessary. Just like adjusting your training plan for a marathon, adjusting your investment strategy can help you stay on track and reach your goals. Don't wait until it's too late to start building your retirement accounts. The sooner you start, the more time you have to build your financial strength and cross the retirement finish line with ease.

9) Invest

Invest in stocks, bonds, mutual funds, and index funds to achieve long-term financial success. This is like an athlete investing in a rigorous training program that develops their strength and agility over the long-term.

Investing can be seen as the "training" of your financial health. Just like a coach develops a game plan for their team, investing allows you to develop a strategy to make your money work for you. It's important to stay focused and take calculated risks to make gains over time.

Of course, investing requires some preparation and education, just like a player needs to learn the rules of the game and practice their skills. You'll need to understand the different investment vehicles available to you and the level of risk you're willing to take on. But with the right approach and guidance, you can work towards achieving financial success and reaching your goals.

It's important to remember that investing isn't a sprint, it's a marathon. Just like building endurance and strength takes time and patience, investing requires a long-term mindset. Keep your eyes on the prize and don't get distracted by short-term fluctuations. Stay disciplined, adjust your strategy as needed, and don't be afraid to take action to maximize your gains. With perseverance, you can build a solid financial foundation and achieve the lifestyle you desire.

10) Work side hustles 

Having “extra” income on the side is a good idea to bring in extra cash and protect yourself in case of job loss. This is like an athlete diversifying their training routines and adding new exercises to their regimen to improve their overall performance.

If you want to boost your financial game, it's essential to hustle both on and off the field. Building your skills and income isn't just about your day job - it's about what you do on the side.

Consider taking on side hustles to earn extra cash and diversify your income streams. Like a pro athlete who trains both in-season and off-season, a side hustle can help you level up and make progress towards your financial goals.

There are countless ways to bring in extra cash, from dog walking and freelance writing to driving for a ride-sharing app or reselling products online. And the more you hustle, the more opportunities you'll create for yourself to score big in the game of personal finance.

Just like an athlete who puts in the extra time and effort to perfect their skills, hustling on the side can help you achieve financial wellness.

11) Minimize your taxes 

by finding smart deductions and tax credits that can help you to preserve more of your earnings. This is like an athlete finding new ways to optimize their performance and minimize the risk of injuries.

Just like in sports, minimizing your taxes is an essential part of the game. Nobody likes giving away more than they have to, especially when it comes to the IRS. It's important to make sure you're taking advantage of deductions and credits, so you can keep as much of your hard-earned money as possible.

Remember, every dollar saved on taxes is a win for your financial health. So put on your game face, do your research, and talk to a tax advisor!

12) Save for healthcare

If you have no insurance, this is even more critical. But the way insurance works for a lot of people nowadays, even those with insurance need to save to stay ahead of possible high deductibles on their plans. 

People don’t plan to break their leg, but once it happens there’s no option but to seek medical help, whether you’ve saved for it or not. Other more routine expenses, like doctor's visits or medicine may be paid for by setting up a health savings account (HSA) through your insurance, which offers tax benefits. Again, for all you readers without insurance, it’s even more critical for you to save ahead of time for emergency medical expenses. 

All athletes plan ahead and make sure their body will be ready for game day. Having the proper preventative care and savings to work through emergencies is exactly like an athlete taking care of their body to make it through the peak physical activity required for game day.

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