Money Matters

What’s financial wellness? And why is it important?


We all know that exercise and meditation are good for your overall health. But have you ever thought about your financial wellness?

Never heard of it before? That’s probably because financial wellness is a concept that’s only just become popular despite it being something that every Aussie, regardless of financial position, should be practicing. Keep reading to find out what financial wellness is and what financial fitness looks like, as well as tips on how to increase your financial wellbeing and reduce financial stress.

What does financial wellness mean?

Financial wellness refers to how healthy your finances are. It’s how you manage daily expenses and make time for budgeting and health checks as part of your financial routine. It also factors in things like how well prepared you are for a rainy day.

But how do you go about measuring your financial wellbeing? Like your mental health, it’s not something you can really put a number on. Instead, it could be things like an open discussion about money, having confidence in your financial decisions, and having the freedom to do the things you love.

Why is financial wellness important?

Neglecting your financial wellness can inject a lot of stress in your personal and professional life. If you are lucky enough to be financially well, both your mental and physical health are likely to be in a better position. You can skip being preoccupied about upcoming bills and putting enough money aside for this week’s groceries and have more time and energy to put towards your job.

When you prioritise your financial wellness, you’re less likely to avoid situations that will impact your short-term finances, such as changing your job. That means you can take more risks with your career, change your profession to something you find more meaningful or enjoy more time with your loved ones.

What is financial fitness, and why is financial fitness important?

Financial fitness is about setting goals, managing debt, saving for emergencies and still having a bit left over for those times you want to treat yourself. Just like exercise and meditation, financial wellbeing is built on the little activities that you make a habit of doing.

What are the steps for creating a budget? And what are some financial fitness tips?

So how do you become financially fit? Like all good training routines, it’s one step at a time. Here’s some financial wellness tips to get you started:

  1. Create a budget starting with your earnings and expenses. Be honest with the numbers – nobody is going to see this besides you and it won’t be effective if the numbers aren’t accurate.
  2. Now that you’re aware of your incomings and outgoings, begin to look for potential savings.
  3. Start building your emergency fund. Life can be full of surprises and a savings safety net could help give you peace of mind. It doesn’t have to be much, but regular contributions could prepare you for unexpected things like a broken washing machine or a pricey medical procedure.
  4. Set yourself a financial goal. This could either be a generic savings target or maybe a big-ticket item like a new car. If you have a Save account with ubank, you can set a savings target and we’ll come up with a plan to help you get there.

It’s time to test your budget in the real world. If the first version doesn’t work for you, feel free to change it up. A budget might make you reconsider how you spend your money, but it shouldn’t turn your life upside down.

How can I assess my financial fitness?

So how do you know if all these steps are helping you become financially fit? Here’s a few things to consider when assessing your financial health:

  • Your net worth, aka everything you own minus what you owe
  • How much you have set aside for emergencies
  • Whether you’re on track to hit your financial goals
  • Whether you’re feeling any financial stress.

Think of financial wellbeing and fitness as exercise. It might be hard getting into the routine, but once you do, you’ll be left feeling better than ever.