The Importance of Financial Wellness & Budgeting

In a world full of opportunities and endless possibilities, there are so many amazing things that you can aim to achieve and experience in this lifetime. As a young minority woman,  born and raised in the small town of Flint, Michigan, in a "lower" to "middle class" household, has always aimed to reach and master financial wellness. 

Financial wellness means different things to different people, but to me, it's more than buying the latest Louis Vuitton pumps every now and then. Financial wellness is an objective that literally impacts every aspect of our lives. Experts say it consists of four key components- save, spend, borrow, and plan. 

Just as we go through different seasons in our lives, there are different levels of financial wellness. The single, childless, twenty-year-old version of me may have considered a steady thirty thousand dollar salary job a considerable step in the right direction towards obtaining my financial goals. However, your needs change as you evolve, gain different responsibilities and take on different roles. One of the most vital skills one can have when working towards achieving financial wellness, aside from self-discipline, is the skill to budget. 

Budgeting often calls for strategy. Know the amount of money you have to work with. In the finance world, we like to call this your assets or income. Knowing how much you spend and not just a ballpark range but specifics from rent, utilities, groceries, insurance, hair, nails, babysitter, gas, phone, etc. These are our expenses or liabilities. All your assets, minus all your liabilities, leave you with your true value, otherwise known as equity. To simplify things, ask yourself, after you have covered all expenses:

• Am I able to put a little away to save? 

• Can I plan for the future with my finances? 

• Am I in a financial position that allows me to have borrowing power when necessary?

Mastering budgeting and reaching the level of financial wellness that best suits your lifestyle can improve one's overall way of life. Financial wellness helps reduce finance-related stress, which impacts emotional health, relationships, family life, work performance, and much more. Keep all of these things in mind to assess how important financial wellness is to you and how you can improve it.