Just as a river needs an unrestricted flow to remain healthy, so too must our financial energy flow freely for optimal financial wellbeing. The concept of financial energy flow is key to understanding and achieving financial wellness. This flow represents the movement of money through our life – from earning and spending to saving and investing. When this flow is clear, we experience financial stability and growth. But when a blockage occurs, our financial health suffers.
The first step to unblocking your financial energy is to identify the issues. Two of the most common factors are high debt levels and poor budgeting. High debt, especially with excessive interest rates, can quickly drain your financial resources, leaving little (or nothing) available for savings and investments.
Poor budgeting, or the lack thereof, leads to uncontrolled spending, making it difficult to keep up and get ahead. These blockages not only disrupt your financial flow but also create stress and uncertainty.
To beat these challenges, it’s essential to manage and eliminate debt. Start by initiating a Debt-Freeze where we stop incurring any new debt. Then we line up our loans from smallest to largest, paying the minimum on all of them, whilst targeting every extra dollar we can find at the smallest. Once the smallest is gone, we roll all the repayment power over to the next, and the next. In this way you will build serious momentum and rapidly put your debts behind you.
As for budgeting, you’ll benefit from creating a realistic and sustainable plan. Remember, a budget is simply a set of instructions for your money. Every dollar needs a job to do, which lines up with your financial goals and your lifestyle. We need to enjoy today while also building a better tomorrow. A budget serves as a roadmap and guides your spending. It channels your financial energy away from random spending.
Improving the flow of financial energy also involves optimising how you earn, save and invest. In the short term, seeking opportunities for extra hours, or side hustles can lift your income. Think about progressing in your job, or changing careers, over the mid-to-long term through additional skills.