What Is Financial Wellness Month? Managing Good and Bad Finance
The New Year signals the beginning of a new financial year. In January, we celebrate financial wellness month and our team at BlueTape has shared our tips and tricks on ensuring you have good financial well-being for the New Year!
Happy Financial Wellness Month!
The beginning of the New Year also marks the start of Financial Wellness month. Withstanding all of the booms and busts of last year, Financial Wellness month presents us with the opportunity to assess our financial situations and try to overcome any stressors and hardships. Even if financial wellness is not first on your resolution list, this first month of the year can be a great time to set yourself up for success for the coming year.
What is Financial Wellness?
Researchers at Gallup commonly define financial wellness as “effectively managing your economic life”
by understanding your financial limitations and financial strongpoints. By assessing your own financial situation, you can make a course of action and plan your spending for the year. The timing of Financial Wellness month can remind us to reflect on our spending from the prior year, especially coming straight from the winter holiday season. For the construction industry, especially, Financial Wellness month is when new projects will be planned
and right before when licenses will be received. This is the perfect time to assess your business’s financial position! Oftentimes, we forget to assert our own financial standing and we disregard the importance of ensuring our own financial stability. Using the tools that BlueTape provides, you can set yourself up for a new year of financial security!
Managing Financial Wellness
Although we have defined financial wellness, we must also ask ourselves what the difference between good and bad financial wellness truly means. Although we can easily deem somebody’s wellness as objectively good or bad, everyone’s financial wellness will differ and be affected by their own situations. For instance, if we are in a “good” financial situation, we can continue to use and build upon the skills that allowed us to be in this position. If our financial situation is not what we desire, we can learn and begin to practice new skills to improve our financial wellness. A usual approach to assessing your own financial position is to start with the big picture. One way to start this process is by examining your incomes and expenses to establish a complete picture of your finances. Next, you should look at your debts and outstanding invoices. At BlueTape, we can provide tools that show you where to start. Taking these steps will allow you to better create and understand your goals when it comes to taxes, revenue, payroll, project capacity, advance payments, margins, debt payment and interest rates, and pricing strategies. Together, this can allow for a company to get back on its feet and further excel its success. When an organization prioritizes its financial wellbeing, we see better planning for projects, better overall business performance, higher employee retention, and increased growth.
We can define good financial wellness as the state of maintaining your finances, fully planning and balancing your expenses and savings, and understanding the most suitable financial course of action to take for the new year.
On the contrary, we can define bad financial wellness as the state of poor financial maintenance, a lack of balance between expenses and plans for saving, and a faulty course of action to take for the new financial year.
However, following a few steps and altering your original plan of action can quickly turn your financial situation from poor to healthy.
Let’s see how!
Know Your Business: Know if you are losing money or earning. Which area of your business works best and runs efficiently? Which areas need improvement? Talk to your accountant, CPA, lawyer, accountant, or financial advisors if you need help. These questions can help guide you in the right direction. Don’t get confused with complicated financial terms and numbers, ask a lot of questions from your accountant, and improve your financial literacy.
Define your goals and budget for achieving your goals. Review your accounts monthly and stay up to date with your accounts and goals.
Invest in the future of your business and your long term goals. Learn new skills, invest in the right equipment, invest in financing tools, invest in marketing and future business.
Wellness for Employees
When employees find themselves in better financial situations, they can create more effective, individualized strategies for dividing and automating their paychecks. This newfound security allows for an overall increase in work productivity. But, how can this be achieved? And, how can it be done easily? One step a large amount of employees disregard is planning ahead for emergencies and other irregular expenses. Those who do actively make notes of these are 10 times more likely to exude healthy financial wellness! Even more, employees are the backbone of small businesses, which means that their financial wellness is super important. By learning skills like improved financial literacy, an understanding of their taxes, building better relationships in the workplace, and saving for retirement, the stress of financial planning can be significantly reduced!
Wellness for Employers
The financial wellness of employers is an important topic, especially for small businesses. The financial state of employers can affect factors such as employee turnover, project management and development, debt and profit balance, and overall business performance. In order for a small business to propel itself forward and grow, employers need to maintain a position of financial stability. By using resources, like those provided by BlueTape, small businesses can better manage their finances.
Remember to consider resources such as:
- Programs that offer free or low-cost financial assistance
- Newsletters and other publications
- Financial saving & planning seminars
- Debt and credit programs
- Contacts on social media
Constructing Financial Stability During a Pandemic: Small Businesses
With the onset of the COVID-19 pandemic, small businesses were hit hard by financial setbacks and economic difficulties. The pandemic took a large toll on financial wellbeing, and it is important to find ways to get back on track. It is common for small businesses to experience issues with cash flow, payment, and the seasonality of business. With a rising unemployment rate and increased, nationwide economic troubles, there was less money to be spent and more financial stress being put on small businesses that don’t have the muscle to sustain such stress. Projects may have been postponed or canceled, fixed costs were higher than decreasing variable revenue, supply costs increased, and pre-established stressors like the seasonality of business began to hit even harder. The stress of being a business owner can be lessened through adequately planning and building good financial habits. Here are a few ideas to help:
Save for Your Retirement: Many business owners forget about their future investments. Find a Small Business 401k plan that works for you. Not only does it give you peace of mind, but there are also tax benefits for retirement accounts.
Understand Your Taxes: Reduce the risk of being audited by getting a better understanding of federal and state tax deductions that work for your construction business. Keep records of all important receipts or transactions.
Invest in the right insurance: Look for financial resources and programs offered by your associations.
Use existing solutions: leverage existing solutions that allow you to organize all your accounting and financing-related documents in one place.
BlueTape is Here to Help!
At BlueTape, our team is devoted to establishing a trusting relationship with our community and this begins with providing all the resources possible. Our company offers a financing solution that allows contractors and suppliers to more easily manage their financial well-being. By utilizing these tools, we hope to lessen the long-term financial effects of the COVID-19 pandemic and ensure that our clients have good financial well-being.
Cheers to a New Year and new opportunities for financial growth!