3 ways to boost your financial wellbeing

Estimated reading time
 5 min

In this article

• Financial Wellbeing explained - what does it mean?
• 3 different types of behaviours of a financial wellbeing
• Make a plan for the future

Having good financial wellbeing isn’t just about how much money you have saved up or what you’re earning.

But what is financial wellbeing? Well, it’s basically your ability to meet your current financial commitments and needs comfortably, while ensuring you have the financial knowledge to maintain this in the future.

It’s about how you feel about your finances, how you manage your spending and saving, and your general attitude towards money.

While having strong financial wellbeing might feel like climbing a mountain (given the current cost of living), there are three things you can do to help improve your confidence and cash flow.

1. Spend smarter, save harder

Generally speaking, people with higher levels of financial wellbeing tend to be active savers, don’t borrow money for everyday expenses and have more spending restraint.

And it goes without saying but the better your financial confidence and control, the better your saving and spending. So, the fact you’re reading this and are keen to understand and improve your financial wellbeing is a good first step towards building that confidence and sense of control.

What can you do?

Set yourself a budget and look at where you’re splurging unnecessarily. A popular way to budget is by using ‘buckets’ to clearly define your income, expenses and savings. Your first ‘bucket’ is for your everyday expenses like petrol, entertainment and groceries. The second can be for large bills – bills you can plan for like car registration, rent or mortgage repayments, as well as utilities. Your third bucket can be for your savings and, depending on your savings goals, you may want more than one savings bucket.

You can use the ANZ 50/30/20 budget calculator to map out how much of your income should go into each of these buckets. Add in some financial information, and we’ll whip up your personalised budget within minutes.

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2. Invest for your future

Investing also has a role to play in boosting your financial wellbeing. If you can, try to focus on long-term assets such as investing in shares, Exchange Trade Funds (ETFs), bonds, or even property.

What can you do?

While your ability to invest money in property or shares depends on how much extra cash you have, you can also look at the investment options that come with your superannuation fund to see what type of investment is right for your circumstances. Not ready to invest? Then start finding a little extra room in your savings strategy to put towards a future investment. The sooner you start investing, the greater your potential for larger returns, as your money has longer to grow.

3. Get savvy with money management

Money management can be a financial wellbeing game changer. People who plan and budget tend to have higher financial wellbeing, which can lead to better-informed financial decisions and product choices too.

What can you do?

Better money management starts with making a plan. Use your monthly spending habits, as well as your monthly take-home pay, to set a budget you know you can stick to. If you don’t have one already, create an emergency or rainy day fund that you access when unforeseen circumstances strike. Even if your contributions are small, you’ll have something to fall back on without having to borrow money at high interest rates.

Bonus tip: Keep your eyes on the prize

Have you heard of Hyperbolic discounting? This is a pattern of thinking where we value rewards that make us feel good now instead of in the future. And when it comes to our financial wellbeing, it can be easy to give in to the temptation of buying a new video game or splurging on a nice dinner because it makes you feel good now.

To reduce the effects of hyperbolic discounting, it’s important to set a goal and keep your eyes on the prize – whether that’s improving your financial wellbeing score or saving for something specific. You can treat yourself along the way as a little reward for achieving key milestones, but it’s important to think about how your actions now will affect your financial future.

For example, instead of splashing cash on a snazzy new yoga mat (when you already have two at home!), you can consider putting that money towards your savings goals.

If you need a helping hand making a goal for your financial wellbeing, then you can download and use our SMART goal dream board (PDF) to get started.