With the springtime spirit of renewal and growth in mind, there’s no better time to start focusing on your financial wellness.
Financial wellness goes beyond just being able to manage your day-to-day finances and keep your head above water with bills and the cost of living. Being financially healthy also involves knowing how to prepare for unexpected expenses and working to achieve long-term goals.
Even more significant is the direct correlation between financial wellness and overall health. Your financial state impacts various aspects of daily life, including your physical, mental, and emotional well-being.
When your money is stable and predictable, you'll experience less stress and have a greater sense of control in life. Financial stability reduces a person's risks of chronic health conditions that they can't afford to treat and helps people make healthy lifestyle choices. You may also experience greater self-confidence, make smarter decisions, achieve a positive work-life balance, and feel less strain in your relationships if you aren't constantly worrying about money.
For these and many other reasons, financial wellness is important regardless of your income, work status, age, or background. In this article, our financial experts offer financial wellness tips to help you discover the freedom to pursue your personal and professional goals
Key Takeaways:
- How to improve financial wellness with a personal loan
- The role of personal loans in consolidating debt and reducing financial stress
- How a personal loan can help build credit and create financial stability
- Tips on responsible borrowing and loan management
- Steps to achieving long-term financial wellness
Understanding Financial Wellness
What is financial wellness, and why is financial wellness important?
It is a fundamental part of living a secure and fulfilling life. Fortunately, anyone can achieve it by taking the right steps and following a personalized approach with the past, present, and future in mind.
What is Financial Wellness?
Simply put, financial wellness is a state of financial confidence and security. It is the overall status of your personal financial situation and something that either creates a feeling of control or chaos regarding your money.
A big part of financial wellness is having peace of mind that you can afford what you need and that an unexpected situation won’t throw your budget totally off-course. The answer to how to improve financial wellness involves various components, such as budgeting, saving money, debt management, and credit health.
Financial wellness isn’t just a luxury or topic of interest for the wealthy elite. It is within reach for all individuals with the right support, knowledge, and long-term perspective.
How to Achieve Financial Wellness
If you’re wondering how to achieve financial wellness, you might start with setting short-term, mid-term, and long-term financial goals. It is also crucial to assess and manage your monthly expenses and eliminate high-interest debt so that you aren't wasting your hard-earned money on exorbitant interest charges.
Having a structured financial plan can help you gain control over your finances and feel more prepared for whatever life throws your way. Establishing a plan involves being responsible and honest with yourself and others in your household about your earning, spending, saving, borrowing, and investments.
How a Personal Loan Can Improve Financial Wellness
One of the many approaches to how to improve financial wellness is to take out a personal loan.
Personal loans like the ones we offer provide flexible funding with predictable repayment plans. You can use personal loans for any reason, such as to stabilize your situation so you can move forward and get on track with your financial goals.
Using a Personal Loan to Consolidate Debt
Many people choose to take out personal loans to consolidate debt.
When you take out a debt consolidation loan, you can combine multiple high-interest credit card debts into a single loan with a lower interest rate. The benefits are simplified payments, reduced financial stress, and less overall money lost to interest payments in the long term.
Reducing Financial Stress with Predictable Monthly Payments
Personal loans can be useful tools for reducing financial stress because they offer fixed repayment terms and interest rates.
Knowing exactly what terms and rates are and feeling confident that they won’t change makes budgeting easier. When you can create a budget that you can stick to, financial wellness is just around the corner.
Building Credit with a Personal Loan
Another benefit of personal loans is the potential to build and repair your credit.
If you make timely payments on your personal loan each month, you can positively impact your credit score. Having a good credit score opens up financial opportunities that you may not have had access to in the past.
Financial Wellness Tips for Managing a Personal Loan
If you are interested in how to improve financial wellness with a personal loan, it’s essential to carefully manage your loan so that you improve your situation rather than complicating it further. Financial education is important to us as a lender, which is why we regularly share financial wellness tips on our blog.
Borrow Responsibly
To achieve financial wellness, remember only to borrow what you truly need and no more.
Whether you take out a personal loan or borrow money from someone you know, ensure that you can afford to pay the agreed-upon installments during the designated time. Credit bureaus take notice of on-time payments and responsible money management, so good habits could soon be reflected in your credit score.
Create a Loan Repayment Strategy
When you bring a new loan into your life, you may need to adjust a few things in your day-to-day spending or routines.
To prevent missed payments and any associated late fees or penalties, consider setting up automatic payments that come directly out of your bank account. If you are able to start saving more money or have an income increase, consider making extra payments when possible to reduce your interest costs. Personal loans often come with no prepayment penalties for paying your loan off early.
Avoid Common Pitfalls
Be mindful of common mistakes that people make when taking out personal loans to achieve financial wellness.
For example, it is generally not advisable to take out multiple loans at the same time. Doing so can create red flags for lenders and credit bureaus while making your budgeting unmanageable.
Financial advisors also warn against taking out a personal loan for non-essential expenses. Carefully consider your needs vs. wants and whether a new financial commitment is the best decision for your long-term wellness.
Understand what interest rates you are eligible for, and review the loan terms carefully. If you aren’t sure if a loan comes with fees and penalties, ask your loan officer to explain the terms to you in more detail.
It’s also helpful to review a personal loan application checklist so that you have all the required documentation readily available and can get the loan funds you need without delay.
Long-Term Strategies to Improve Financial Wellness
The key to how to improve financial wellness is to think beyond just the here and now. Although we cannot predict the future, financial wellness hinges on thinking about the “What ifs?” and being as prepared as you can for the unexpected.
Budgeting and Expense Tracking
Keeping track of how much you spend each month is crucial for getting on a good path toward financial wellness.
Whether you use an online spreadsheet, mobile app, or simple notebook, create a detailed budget to track your income and expenses. Once you have a clear assessment of where your money is going each day, week, and month, you can adjust your spending habits and accurately assess your loan needs.
Set spending limits for yourself and cut out unnecessary expenses if you have trouble staying within your budget. Small lifestyle changes can make a big difference in your financial future.
Building an Emergency Fund
Another important part of boosting financial wellness is building an emergency fund to prepare for unforeseen circumstances and avoid financial setbacks.
Saving money for unexpected expenses can mean the difference between spiraling into crisis mode and staying on track with just a minor bump in the road. One idea is to establish a separate, high-yield savings account designated only for emergencies so that you don’t tap into it for discretional spending.
A good rule of thumb is to set aside three to six months' worth of living expenses in an emergency fund in case you experience a medical emergency, need urgent home or car repairs, or lose your job.
Planning for the Future
Many people benefit from consulting a financial counselor or trusted advisor to plan for their financial futures. If you feel confident in these matters, you could discuss future plans with your parents, children, spouse, or other important people in your life.
Long-term financial planning typically involves contributing to retirement savings and investing your money. These goals should span several years or even decades into the future. When you discuss long-term finances, you’ll also want to consider paying down debt, minimizing your tax liability, and taking out insurance policies. Estate planning, such as creating a will or trust, can come into play, as well as saving for a child’s future education and adjusting your investment strategies for inflation over time.
As you move through life, it may be necessary to adjust your financial plan periodically. Make a point to review your plan at least once per year and change it based on major life events, your employment situation, and your evolving goals.
We Can Help You Achieve Financial Wellness
We hope that you now understand what financial wellness is and have a renewed appreciation for why financial wellness is important. We love thinking about the spring season as a time to adopt new healthy habits and start looking to the future for a renewed sense of growth and prosperity.
In our experience in the financial industry since 1974, we've seen many of our clients achieve financial wellness after taking out personal loans. Our loans can be used as a strategic tool to improve your financial situation when times get tough and when you aren't sure where to turn to get out of a challenging situation. However, we can't emphasize enough the importance of responsible borrowing and financial planning once you take on a new loan burden.
If taking out a personal loan feels like the right move to help you achieve long-term financial stability, we are here to help across our many local branches in Alabama, Georgia, Tennessee, and Texas. We’ve simplified the online application process to make approval easier than ever. Our fast, affordable loans can help you get back on track while consolidating your debt and helping you rebuild your credit score.
Please call or visit the branch nearest you to discuss your loan options, or complete your application online today if you’re ready to take the next step in your financial wellness journey.
