Welcome to the world of “wealthness”—a blend of wealth and wellness, focusing on creating healthy financial habits to support you. Just as you take care of your physical and mental health, it's essential to nurture your financial health. We’re here to help guide you through some simple yet effective habits to help you achieve financial wellness. These tips are designed to support you, whether you’re beginning your career, preparing to start a family, or considering investment opportunities.
Set Clear Financial Goals
First things first: know what you want to achieve financially. Setting clear, achievable goals gives you direction and motivation. Start with short-term goals like saving for a vacation or paying off a small debt, and gradually work towards long-term goals like buying a home or retirement savings. For example, you might aim to save $1,000 in the next six months for an emergency fund as a short-term goal, while a long-term goal could be to save $20,000 over the next five years for a down payment on a house.
Create a Budget
A budget is your financial roadmap. It helps you track your income and expenses, ensuring you're not spending more than you earn. Start by listing all your sources of income and then categorize your expenses (rent/mortgage, groceries, entertainment, etc.). Allocate a certain amount to each category and stick to it. For instance, if your monthly income is $3,000, you might allocate $1,000 for rent, $300 for groceries, $150 for utilities, $200 for entertainment, $500 for savings, and $350 for miscellaneous expenses.
Build an Emergency Fund
Life is unpredictable, and an emergency fund acts as a financial safety net. Aim to save at least three to six months' worth of living expenses. For example, if your monthly expenses are $2,000, you should strive to have at least $6,000 to $12,000 in your emergency fund. This fund should be easily accessible, so consider keeping it in a high-yield savings account.
Manage Your Debt
Debt can be a significant obstacle to financial wellness. Prioritize paying off high-interest debt first, like credit card balances. Consider using methods like the avalanche method (paying off debts with the highest interest rates first) or the snowball method (paying off the smallest debts first to build momentum). For example, with the avalanche method, if you have a credit card with a 20% interest rate and a student loan with a 5% interest rate, focus on paying off the credit card debt first. On the other hand, with the snowball method, if you have a $500 credit card debt and a $10,000 student loan, pay off the $500 debt first regardless of the interest rates
Invest for the Future
Investing is key to growing your wealth over time. Start by educating yourself about different investment options like stocks, bonds, and mutual funds. Consider opening a retirement account, like an RRSP or TFSA, and take advantage of employer pension plans with matching programs if available. For example, if your employer offers a match of up to 5% of your salary, make sure to contribute at least that amount to get the full benefit.
One crucial habit to adopt is to pay yourself first. This means prioritizing your savings and investments before spending on other things. Set aside a portion of your income each month to go directly into your savings or investment accounts. By doing so consistently, you ensure that you are steadily growing your wealth and securing your financial future.
If you're unsure where to begin, we’re here to help. Our team of experts can guide you through the process and help you make informed investment decisions tailored to your financial goals.
Spend Less Than You Earn
It’s tempting to increase your spending as your income grows, but it's crucial to keep your expenses lower than your earnings. Focus on prioritizing your needs over your wants and practice mindful spending. Avoid falling into the trap of lifestyle inflation by finding joy in simple, cost-effective activities. For example, instead of dining out frequently, try cooking at home and having friends over for potluck dinners.
Seek Professional Advice
Sometimes, navigating the financial world can be overwhelming. Don’t hesitate to seek help from us at Innovation Wealth through Aviso Wealth. Our team of experts can provide personalized advice and help you create a comprehensive financial plan. We offer expert financial advice made simple.
Remember, achieving financial wellness is a marathon, not a sprint. By adopting these healthy financial habits, you’re setting yourself up for a secure and successful future. Start small, stay consistent, and watch your wealthness grow!
Reach out to arrange a meeting with one of our team members to talk about your financial objectives and create a plan to meet them.
Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc.
