Financial wellness can improve mental health, relationships, and work productivity. Budgeting is one way of achieving financial well-being. Budgeting allows you to set specific savings goals that will lead toward short- and long-term goals, providing extra motivation to stick to your budget plan. Mental budgeting can also help relieve stress by increasing financial self-efficacy. Furthermore, it promotes healthier spending patterns by raising debt awareness.
1. Reduced Stress
Financial concerns can be one of the leading sources of stress. They can reduce sleep quality, cause anxiety and depression symptoms, and negatively affect work performance. Monitoring spending and setting financial goals is an effective way to lower levels of uncertainty that contribute to stress levels and keep anxiety under control.
Budgeting helps you say “no” to unnecessary purchases and invest in what matters most, knowing you can afford it. Being able to save for emergencies and debt repayment as well as creating a safety net against unexpected circumstances is immensely reassuring and stress-reducing.
4. Increased Energy
Every morning we find ourselves struggling to wake up, drinking an additional cup of coffee to combat the afternoon slump, and managing too many tasks at once. Every decision and daily task affects our energy reserves either positively or negatively, with every decision either increasing or diminishing them.
But it’s not just what we consume that depletes our energy; our finances can do the same. By budgeting, we can plan for unexpected circumstances, pay down debt faster, and save for our future—all of which contribute to overall wellness.
5. Better Self-Esteem
People often view budgeting as restrictive; however, having an effective system in place will help identify luxury items that might be out of their budget and encourage them to save for emergencies or goals. Simple math will do: calculate your income (net income) and subtract expenses; whatever’s left can go toward savings goals, debt reduction plans, or paying off credit card balances.
Establishing and adhering to a budget will provide peace of mind that your finances are under control. It could even give you motivation to work harder or reduce spending in certain areas in order to reach where you want to be financially.
6. Better Relationships
Maintaining healthy relationships can significantly enhance your well-being. Setting up a budget will allow you to prioritize what matters most while simultaneously highlighting luxuries that may not fit within your means, prompting changes.
Are you seeking more knowledge about budgeting and financial wellness? CU Thrive is offering events featuring Columbia experts that will teach the Money Matters Challenge to improve your finances! Enroll in this event to start building up your savings and spending wisely each month, which will prove to be a worthwhile practice over time.
7. Better Mental Health
Even without an official mental health condition, financial stress can negatively impact our emotions. By adhering to your budget and creating healthy habits such as following it more regularly, developing better mental wellness becomes possible.
Budgeting is the practice of reviewing your income and expenses to identify where your money is being spent each month, then creating a balanced spending plan between necessities like rent/mortgage payments, utility bills, food costs, and enjoyable experiences. Knowing that an amount has been set aside specifically for enjoyment can ease post-purchase guilt while allowing you to fully enjoy yourself without feeling financially irresponsible.
8. Better Financial Health
Financial wellness refers to managing both short- and long-term expenses effectively, creating an emergency savings fund, and reaching financial goals for the future. Establishing a budget can help you identify areas in which unnecessary spending could be reduced while increasing savings and debt repayment, ultimately decreasing stress levels, taking back control over finances, and improving overall wellness.
Studies demonstrate the detrimental effects that financial stress has on mental health, often leading to depression, anxiety, and insomnia, even worsening work performance. But enhancing financial well-being has a ripple effect that will positively influence all areas of your life.
9. Better Overall Wellness
Wellness involves many factors that contribute to our overall health and happiness, including budgeting. Setting budget goals allows you to connect with what matters to you while aligning spending habits with these objectives.
Tip: Be sure to include healthcare costs in your wellness budget, such as routine checkups, preventative care, and therapy sessions. Consider opening a healthcare savings or flexible spending account so you can save money on co-pays and deductibles.
It can be easy to overlook the inextricable link between mental and financial wellness. By prioritizing mental wellness, one can reduce stress and strengthen emotional resilience—two elements that are integral parts of better financial decisions in the future.
