The first thing about understanding financial wellness is understanding what it means for you.
Personally, Financial Wellness is the state of being comfortable with my financial decisions today and being satisfied with my financial discipline due to my previous and current financial knowledge.
By definition, to be Financially Literate is to be knowledgeable of financial concepts in order to make financially responsible decisions in your everyday life. For example, knowing how a savings account works, how to manage a credit card properly, how to avoid debt and the right financial steps to take to achieve your life goals. Whereas Financial Independence means to have a clear financial goal that you are able document (whether physically or mentally) with specific plans towards achieving these goals and being satisfied with the progress towards these goals.
One key approach I preach as a member of the Victoria Mutual Group is everyone should act. Yes, I said A.C.T.
A for assessing your current situation. You know, recognizing what you want and what improvement you wish to make
C for creating realistic goals and a game plan
T for tracking your progress. This can be done through a budget planner (click my flow.page to access an electronic version https://www.flow.page/harta_vmfeteambassador) or friends helping to keep you accountable
Before you begin your journey you need to understand where you are now before improving or developing your financial journey. Thus one ought to assess their situation, then set clear goals that ought to be clear and specific in what they desire.
Life is a cycle, a series of events and as in every cycle, we evolve in each stage and when it comes to finances, we all fall somewhere in what is called the Financial Lifecycle. In the Caribbean, we have a range of stages within this cycle. Some may skip a few and some may take part in each. There is:
Early childhood,
Secondary education,
Tertiary education,
Career development,
Raising a family,
Pre-retirement and
Retirement.
And at each of these stages undoubtedly our wants and needs fluctuate.
To improve yourself financially and achieve financial wellness you must be able to identify where you are in your financial lifecycle and understand your financial profile. Your financial profile determines how you view money. And to better gain an understanding of your financial profile one has to ask questions such as: What is/are my sources of income? How do I view money or how do I meet my financial decisions? How do I spend my money? How often do I save or invest? Do I ever budget and when I do budget do I ever stick to it? Do I have a clear idea of my future financial goals for example a car, house, capital for my business venture, etc? How would I describe my current knowledge of finances (do I understand how money works or can I define financial terms?)
Answering the above questions honestly will provide you with an insight on your financial perspective hence determine your financial profile.
Stay tuned for more in my future post
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