4 Different Paths to Financial Wellness to Consider in 2025
With 2024 coming to an end and 2025 beginning, many people use this time to think back on the previous year and get ready for the next one. Making resolutions is a common practice while easing into the new year, as a new year is often seen as a fresh start and an opportunity to try something new.
This is a great opportunity to explore how you can boost financial wellness and success in the upcoming year. Whether you want to optimise your taxes, improve your credit score or are looking for the best loans for employed people, now is the right time to plan before you take action.
If you’re considering taking different paths to financial wellness for a financially secure 2025, this article is for you. Let’s begin!
What is Financial Wellness?
Financial wellness is a term to describe the overall well-being of your money-related matters. It describes your ability to manage money, make informed financial decisions, and your financial readiness for the future.
4 Ways That Contribute to Financial Wellness
1. Assess Your Current Financial Situation
Taking stock of your current financial standing is the first step to take before embarking on your journey to financial wellness. Take a closer look at your income, expenses, savings, and debts to understand where you stand and how you can improve your financial situation.
Here are some steps you can take:
- Track all your income sources: Make a list of your sources of income, spanning monthly paychecks, side jobs, and investments.
- Monitor Your Expenses: Track where all your hard-earned money goes by keeping a physical or digital record of your expenses. Categorise them into fixed and variable expenses for better tracking.
- Evaluate Your Debts: Similar to tracking your expenses and income streams, keep a close eye on your debts. These can include all your credit cards, loans, and mortgages. A thorough understanding of your debts helps in creating a realistic roadmap towards financial wellness.
A comprehensive analysis of all these factors can help in charting a path towards achieving your money goals for the year and achieving financial wellness.
Set Purposeful Saving Goals
Goals vary from person to person and depend on your ambitions, life stage, values, and your financial health.
With a goal in mind, it’s easier to have a ‘why’ to work towards and motivate you to achieve it. Your money goals need to be time-bound. Whether it’s for the short term, like saving up for a vacation, or the long term, like buying a car, the financial objectives you set yourself must be realistic, purposeful, and clear to achieve.
One way to start is by setting a specific amount of money to save. For example, if your goal is to save £1200 for a vacation by the end of six months, you can reach your goal by saving £200 per month.
Assigning a specific amount to save and a reasonable timeline that aligns with your savings goals allows you to measure progress easily, stay on track and adjust the process if needed.
Diversify Your Investment Portfolio
Most investors count on a diverse investment portfolio to balance risk and reward without causing any major imbalance to their daily finances. Understand how you can balance your investments of cash, bonds, shares, properties, gold and silver, and other investments like cryptocurrencies.
For example, a portfolio entirely made of equities may give you higher returns and beat inflation but may also potentially see a sharp fall in the future years. If you’re unsure about where to begin, don’t worry, as you don’t have to make all financial decisions by yourself. Seek help from financial advisors who can help in aligning your investment decisions with your life’s goals.
Audit Auto-Payments and Subscriptions
Monitoring your subscriptions and auto-payments is a step that’s often overlooked. Companies are smart in deceptively trapping consumers into enrolling for subscriptions they never really wanted in the first place.
If you feel your bank statement reads differently than it used to, check for any autopayment facility or subscription you’ve inadvertently signed up for. Although these forgotten or overlooked charges may seem small, they can accumulate over time and impact your savings.
Get an account statement with the last few months transactions and identify any untoward expenses on your account. If you note any, quickly contact the company and unsubscribe from the subscriptions.
In Conclusion
Figuring out how to embrace financial wellness in the new year can seem like a complicated and tedious process to follow. But just as any long-term commitment begins with the first step and the right guidance, embrace these four different practical and simple strategies, one step at a time.
This starts your journey towards financial wellness in 2025, opening doors to building positive financial habits and strengthening your financial health for a long time.
With 2024 coming to an end and 2025 beginning, many people use this time to think back on the previous year and get ready for the next one. Making resolutions is a common practice while easing into the new year, as a new year is often seen as a fresh start and an opportunity to…
