Financial wellness. Whether people like to admit it or not, money is essential. Our relationship with money – but not necessarily how much we earn – determines how much enjoyment, freedom, and security it brings us. Managing finances can be the most stressful thing in someone’s life, or it can be a comfort source.
What Is Financial Wellness?
Financial wellness doesn’t mean having a million dollars in the bank or being able to afford all the latest gadgets that will impress your friends and neighbors.
Financial wellness is having a healthy relationship with money. It’s all about balance. You don’t want to be an over saver who is scared ever to spend a dime and gets absolutely no enjoyment out of their savings. But you should also give money the respect it deserves by living within your means and making sure you’re saving enough for retirement.
Being healthy from a financial standpoint means having enough in your accounts that you don’t need to sweat when life throws a curveball your way. It means that you’ve examined your budget, your relationship with money, and formed some plan, even if you don’t always execute it perfectly. If you succeed more than you fail, you’ll still be sound financially.
What Financial Wellness Can Do for Your Health
Many people think more in terms of what money can do for their happiness rather than their health. But there are a surprising number of ways in which achieving financial wellness can help your physical and mental health.
- Affording medical care: Many people don’t see doctors when they suspect something is wrong because they can’t afford it. It takes money to pay the doctor and take time off of work to attend the appointment.
- Paying for medications: Some people skip the medications they need because they have to choose between them and other essentials like food and rent.
- Reducing stress and anxiety: If you struggle to pay your bills or live paycheck to paycheck, it can cause stress, anxiety, and even depression. You can also feel like a failure, which can harm the relationships in your life.
- Getting more sleep: Ever stayed up at night going over bills in your mind, and wondering how you’re going to pay for something? It’s a common thing. Skimping on the shut-eye can have negative consequences for your immune system and health.
- Improving relationships with others: Finances can cause friction between parents and children, spouses, siblings, and even friends. It’s a leading cause of divorce, and divorce can be notoriously hard on people’s health.
- Giving you choices: No one wants to feel trapped, but many people do. They go to jobs every day that they hate, just so they can pay the bills. Having your financial house in order gives you the freedom to shape your life how you want it. You have choices, and that can make you a happy and healthier person.
Ways to Improve Your Financial Wellness
Even if your situation currently feels hopeless, there are simple steps you can take to improve your finances today. Let’s look at the easy ones and why they’re essential.
- Start an emergency fund: A shocking number of people don’t have emergency savings. Up to 25 percent of adults in the U.S. don’t have any emergency money in the bank. If that sounds like you, take a step to change it today. Open a savings account and stick $5 or more in it today if you can afford it. Don’t have any money? Consider selling something you own or get creative about earning money for your account. Although it may not seem like much, frequent small deposits into your account will add up fast. Shoot for at least $1,000 and eventually strive to set aside three to six months of expenses in your emergency fund.
- Create a budget: It’s hard to get ahead if you overspend. That’s where a budget comes in. It can help you pinpoint how badly you’re digging yourself into a hole each month or identify how you can do better. Make a list of your essentials, such as rent, food, transportation, and debt payments. If you are spending more than you’re taking in each month, find solutions like cutting the cable or taking in a roommate.
- Join your 401K at work: You haven’t truly achieved financial wellness unless you’re saving for the future. Even if you only start with 1 percent deductions, you must join your company’s 401K as soon as you can. If you don’t, you’re likely leaving free money on the table because you’re not taking advantage of the company match most workplaces offer. Make it a point to raise your contributions by a percentage or two each year for the next five or ten years.
- Pay your bills on time: This will boost your credit score. Keeping your credit score high is a great way to save yourself money in the present and the future. It’s an incredibly important part of your financial wellness.
After you’ve done these things, you might be ready to take things to the next level with these additional steps.
- Look into insurance: Financial wellness means exploring or planning for all possibilities, like disability and life insurance. You may not need disability insurance, but it’s wise to make an educated choice. Learn what it covers and how much it costs and then decide.
- Dig yourself out of debt: Start with your credit card debt. Knock that out as quickly as you can. Even if it means making sacrifices, such as cutting your entertainment budget, trading your new car in for something used, or getting a second job. You’ll feel better when you no longer owe credit card debt. When that’s conquered, start chipping away at your student loans, car loan, home loan, and any other debt you carry. The ultimate goal is to be debt-free.
- Visualize your future and retirement: Write down what you’d like to do with your life. How
early you’d like to retire, what you’d like to do in retirement, or any secret money-related goals you have for yourself. Spend a few minutes to daydream. Our daydreams are powerful stuff – they can cause you to spring into action and work with a laser focus toward your goal.
Don’t Let Money Control You
Your life will be so much happier, healthier, and richer – both in terms of dollars and experiences – if you take responsibility for your financial wellness. You won’t worry as much. You’ll have less friction with others. You’ll finally feel in charge of your own life and destiny. And that’s something you can’t put a price tag on.