From managing day-to-day expenses to planning for long-term goals, our financial health plays a significant role in our overall quality of life. Financial wellness means having a healthy relationship with money, characterized by stability, security, and confidence in our ability to meet our financial goals.
However, achieving financial wellness can sometimes feel overwhelming, leaving many questions and uncertainties.
We will help you understand financial wellness and provide tools to assist you on your journey to financial well-being. Let's explore these financial wellness resources together.
What is financial wellness?
Financial wellness goes beyond just having enough money. It encompasses our ability to effectively manage our financial resources, make informed decisions, and achieve financial goals that align with our values and aspirations. It involves being aware of your financial situation, making informed decisions, and having the resources to achieve your financial goals.
Financial wellness is a continuous process that evolves as our needs, goals, and circumstances change. Knowing this definition is crucial to working towards a healthy financial life.
Financial wellness questions:
As you embark on your financial wellness journey, you might have several questions about your finances. To help you understand your financial situation better, consider asking yourself the following financial wellness questions:
- Can I cover my basic expenses, such as housing, food, and healthcare, without worrying about money?
- Do I have a budget and plan to save for short-term and long-term goals?
- Do I have an emergency fund to cover unexpected expenses?
- Am I managing my debts responsibly and making progress toward paying them off?
- Do I have adequate insurance coverage to protect myself and my loved ones in case of unexpected events?
- Am I investing for my future retirement and other long-term goals?
- Do I have a clear understanding of my financial goals and a plan to achieve them?
- Do I have a plan for my estate?
These questions serve as a starting point for evaluating your financial health and identifying areas that require attention.
Financial wellness checklist:
Once you have identified areas to improve, it's time to create a financial wellness checklist. A financial wellness checklist lists goals you want to achieve to improve your financial situation. For example, your financial wellness checklist may include goals like creating a budget, paying off credit card debt, and saving for retirement. By creating a financial wellness checklist, you can track your progress and stay motivated to achieve your goals. A financial wellness checklist can be an invaluable tool in helping you maintain a healthy financial life. Here's a simple checklist:
- Create SMART (Specific, Measurable, Achievable, Relevant, and Time-bound.) financial goals.
- Create a realistic budget that accounts for all income and expenses.
- Establish an emergency fund with at least three to six months of living expenses.
- Pay off high-interest debt as soon as possible.
- Save for retirement by contributing to a retirement account, such as a 401(k) and/or IRA.
- Diversify your investments to reduce risk and maximize returns.
- Monitor your credit score and report regularly to ensure accuracy and identify potential fraud.
- Review your insurance coverage to make sure it meets your needs.
- Create or update your estate plan, including beneficiary designations, will, power of attorney, and healthcare directives.
Financial wellness assessment:
A financial wellness assessment evaluates your current financial situation to identify strengths, weaknesses, and opportunities for improvement. Our Stability Index can help you see your financial situation and next steps. We have monthly webinars to help you improve your financial stability and confidence tailored to your specific level.
Financial wellness check:
Conducting a regular financial wellness check is crucial in ensuring you stay on track with your financial goals. Set aside time each month or quarter to review your budget, savings, investments, and debt. This review will help you identify any discrepancies or areas where you may need to adjust your financial plan. Additionally, consider meeting with a financial professional annually to discuss your financial progress and receive expert advice on managing your finances.
Financial wellness resources:
11 Financial well-being resources to know about:
- Budgeting: Creating a budget is crucial for managing your money effectively. Our Ideal Budget can show you what you should spend in different categories. Many online tools can help you track your expenses, set financial goals, create a plan to achieve them, provide insights into your spending habits, and help you identify areas where you can cut back.
- Credit monitoring: Keeping track of your credit score and ensuring the accuracy of your credit history is critical to financial wellness. Resources like credit counseling services and websites like Credit Karma or some credit cards can help you monitor your credit score. To get a free copy of your credit report, go to www.annualcreditreport.com.
- Debt management tools: If you are struggling with debt, the Momentum Method and the Debt Momentum Tool, along with repayment calculators, can help you create a strategy to pay your debt off and track your progress.
- Financial education and literacy resources: Continuous learning and improvement of financial literacy are essential for achieving and maintaining financial wellness. Websites like Your Money Line, Investopedia, and the Consumer Financial Protection Bureau (CFPB) offer various educational resources, articles, and guides to help you improve your financial knowledge and make informed decisions.
- Savings and investing tools: Building savings and investments are critical components of financial wellness. Apps can help you automate your savings, invest in stocks and other assets, and grow your wealth over time.
- Financial counseling and coaching services: Sometimes, seeking professional guidance can be beneficial. A Financial Guide, such as those offered at Your Money Line, can help you set your financial goals and work alongside you on your financial journey. Our Financial Guides are Accredited Financial Guides (AFC) from the Association for Financial Counseling & Planning Education (AFCPE) and can provide personalized guidance and support on your financial journey.
- Personal finance books: Personal finance books are a great way to learn about financial wellness. Some popular books include "The Millionaire Next Door" by Thomas J. Stanley and William D. Danko, "Your Money or Your Life" by Vicki Robin and Joe Dominguez, and Ramit Sethi's "I Will Teach You to Be Rich."
- Financial planners: Help you create an investment strategy tailored to your goals, risk tolerance, and time horizon. Some manage your investment portfolio and make investment decisions on your behalf. Some planners will help you create a tax plan to minimize liability while achieving your financial goals. Planners can recommend estate document creation and assist the estate planning attorney. Planners will help evaluate the options available to you and assist in picking the best choices based on various factors.
- Financial therapist: Help individuals and couples explore the emotional, psychological, and behavioral aspects of their relationship with money. They integrate principles from financial planning and psychotherapy to help clients develop healthier and more balanced relationships with their finances.
- Retirement planning resources: Planning for retirement is essential for financial wellness. It is a long-term financial goal that requires careful consideration. Resources such as the Social Security Administration website and the Employee Benefits Security Administration (EBSA) can provide valuable information and tools to help you plan for your golden years.
- Workplace benefits and employee assistance programs (EAPs): Many employers offer benefits and EAPs that include financial wellness resources such as Your Money Line. YML offers self-serve personalized options on our Dashboard and unlimited one-on-one sessions with financial guides.
Financial wellness is essential for a stress-free life. Using the above-mentioned resources, you can assess your financial well-being and plan to achieve your financial goals. Remember, financial wellness is a journey, not a destination. It takes time, effort, and discipline to achieve financial stability, but the rewards are well worth it, and we are here to help you throughout your journey.