5 Ways To Achieve Lifelong Financial Wellness

Karen Bennett  Tue, Jun 13, 2023, BankRate

Problems such as lingering high inflation, increased borrowing rates and the threat of a recession have many Americans worried about their finances. In fact, more than half (52 percent) say money has a negative impact on their mental health, according to Bankrate’s financial wellness survey.

Financial wellness is the ability to manage your money in a healthy way, which involves living within your means, setting financial goals and taking the necessary steps to meet them. Financial wellness can enable you to weather things like a job loss or an unplanned large expense. It provides the peace of mind that leads to reduced stress, a healthier mindset and better sleep.

Here we’ll go over why financial wellness is so important and then share some simple ways you can become more financially healthy.

Benefits of practicing financial wellness

Covering unplanned expenses

Money in a savings account can help you cover expenses that can arise suddenly — such as a car repair or an emergency room visit — without having to go into debt. However, only 43 percent of U.S. adults would pay for an unexpected expense from their savings, Bankrate’s latest emergency savings report found. Experts recommend having an emergency fund that can cover at least three months’ worth of living expenses. A high-yield savings account provides easy access to your money, making it a good place for your emergency fund.

Bouncing back after a job loss

When you have a healthy nest egg in a savings account, you’ll be able to weather a sudden job loss or decrease in income more easily. Having several months’ worth of living expenses gives you more freedom to conduct a thorough job search instead of feeling the need to take the first job opportunity that comes your way.

Having a high credit score

Paying your bills on time and not carrying high debt contributes to a good credit score. Those with a high credit score often receive lower interest rates on credit cards, higher credit card limits, lower mortgage interest rates and lower insurance premiums.

Reducing your need to borrow

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