Good Financial Management is Healthy, Literally

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It is generally true that money cannot buy happiness, or even good health.

However, being financially literate can help people lead healthier lives as they get to be more productive and make wiser decisions. If you can manage your finances better, it is highly unlikely for you to fall victims to unnecessary stress thus succumbing to high-risk behaviours, such as smoking, high caffeine intake, excessive consumption of alcohol, and binge-eating.

These could easily lead to much serious problems, including insomnia, migraine, inability to control urination, damaged liver, depression, cancer, stroke, cardiovascular and respiratory diseases.

Apart from above mentioned, financial literacy will empower people to be aware of the resources they need to take care of themselves in the long run.

What is financial literacy and why does it matter?

Monetary guru and best-selling author Dave Ramsey defined financial literacy as “the possession of skills that allow people to make smart decisions with their money”. He added that no one has truly grasped financial literacy until they can regularly do the right things with money that lead to the right financial outcomes.

Let’s face the fact, changes do not magically happen overnight. It takes a clear motivation and strong willpower to break free of old habits, especially those that do not inject positive results into your life. The same goes to financial management. The best advice would be to start with baby steps and to bear in mind that discipline is the key.

1. Make and stick to a budget

You can only control your finances if you can keep tabs of where your money goes. Only by tracking your spending will you identify ‘area of excess’. You will learn how to prioritise and cut back on unnecessary spending, which will leave you enough change to either save or pay your debts.

2. Live within your means

A good rule to follow is: “If you have to borrow, it means you cannot afford it.” This applies to everything, especially bigger purchases with credit options. While it is tempting to swipe a plastic card to buy whatever you think you need on the spot, it is best to rethink your choices. Just because you are not pulling money out of your own wallet, it does not mean you will not pay a heavy price for it later.

3. Set specific financial goals

They can be emergency funds or for retirement. However, many people forgot about other life events that may require you to fork out a high amount in a short time. Thus, it is vital to also set multiple goals such as children’s college education, travel fund, possible home improvements, new cars or even road tax renewals.

Is money the only solution?

No. There are a lot of other determinants that could guarantee good health outcome such as income level, living conditions and education background.

According to US-based non-profit group Healthcare Financial Management Association, researches showed that approximately 20 percent of a person’s health is based on heredity and access to medical care, while the remaining 80 percent is determined by physical environment, health behaviors, and socioeconomic factors.

Therefore, it is instrumental to weigh in all other determinants when making daily decisions regarding your own well-being. Wealth cannot buy health, but money does matter.

Meanwhile, AIA will be holding a free seminar on Saturday, 02 March 2019, from 2.30pm to 4.30pm at the Raffles Hotel Le Royal, with the focus on ‘Financial and Tax Literacy for Non-Finance and Business Owner’.

The seminar will feature BanhJi founder and chief executive officer, Mr Sim Chankiriroth, who has had over 15 years of experience in finance at senior levels.

Aside from his positions in the award-winning financial technology (fintech) startup, Mr Chankiriroth also holds several other high-ranking posts including the Governing Council’s member of Kampuchea Institute of Certified Public Accountants & Auditors.

Participants will learn the fundamental knowledge of financial management and tax literacy, especially for business owners. Those interested in learning more about the topic may inquire about invitation to the seminar via AIA Client Care at 086 999 AIA (242).

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