Discover where you are on the road to financial wellness with these tips and tools.
Improving Your Financial Health is Possible
How we handle our finances can be seriously stressful.
Stress Over Finances. This truth applies not just to you — it impacts millions of Americans daily. A March 2024 survey found that nearly half of U.S. adults (47%) admitted that money harms their mental health, and causes stress in their lives.
Change Habits. So how do we get a handle on what can keep us up at night and make us miserable? We can look for ways to break negative habits and set a course for better behaviors when it comes to our money.
Achieving Financial Wellness
Enter financial wellness or financial well-being, terms that can mean having a good handle on how we manage our finances today – including meeting all of our obligations with enough left over to save for a secure future.
Stacy Miller, a certified financial planner at Bayview Financial Planning, aims to help clients reduce stress related to their finances by giving them the tools they need to make more informed choices.
“Financial wellness starts with understanding your baseline financial situation and making it better,” Miller says. “The goal is to feel better. It’s like going to the doctor and getting your labs done only to find out that your bad cholesterol is high. Your next steps are to get educated about how to make it right and make your body well. You’ll feel better and be better.”
So she lays the groundwork for those ‘poor lab results’, then follows up with actionable steps to help her clients find financial wellness.
The Elements of a Solid Financial Plan
Sean Rawlings, founder and financial planner with WealthBound Advisors, says, for his clients, financial wellness means having confidence around their money. “This manifests itself in a few different ways, but it all starts with a plan.”
And while everyone’s situation is different, Rawlings acknowledges, the components of a solid financial plan can include:
An Effective Budget
While budgeting is not one size fits all, an effective spending plan should ensure you pay yourself first by moving money to savings and investment goals, then spending what’s left. Known as reverse budgeting, it’s a smart way to help make sure you are saving for the future first.
Organization
It’s hard to achieve financial wellness without being somewhat organized. That can mean consolidating old retirement accounts, including 401(k) accounts from former employers, so you can know exactly where your money is.
Automation
If you haven’t automated almost everything related to your finances, it’s time. When income hits your checking or savings account, Rawlings says, that means you’ve already delegated where those dollars should be put to work. “This usually looks like a percentage going to debt, plus a savings account for vacation, investments, and future goals. Since you’ve already automated these things it removes any stress or decision-making.”
Protection
This means having adequate insurance protections in place (think life, home, auto, and disability) to help ensure you won’t lose what you worked so hard to earn.
“When you combine all of these things, people feel a sense of empowerment over their money,” Rawling says, “and it gives them the confidence to pursue what they want.”
Online Resources for Financial Wellness
The Consumer Financial Protection Bureau’s website includes a financial well-being quiz. Pam Horack, a certified financial planner at Pathfinder Planning LLC in South Carolina, has clients measure their financial wellness by taking the CFPB’s quiz.
“Afterward, we focus on creating a forward-looking budget that includes emergency savings and an easily implementable system,” Horacks says. “Then, after about six months, we have them take the quiz again. So far, we have seen an almost 30% increase in the way our clients feel about their financial wellness.”
SavvyMoney’s Financial Checkup Tool
SavvyMoney users can access a special financial checkup tool through their online banking dashboard. Click on “Take An Assessment,” then answer questions on household spending, financial planning, and monthly budgeting. The questions range from multiple-choice to open-response and were created to help gain insights into a person’s current and future financial standing.
After taking the Financial Checkup, you’ll receive:
- Your financial wellness score
- Your credit score
- Your debt-to-income ratio
- Your spending ratio
- Your monthly budget summary
You’ll also receive personalized recommendations that can be used as a map to help reduce spending and optimize debt-to-income ratios, providing a path for a more secure financial future.
Do one thing: Want to up your financial wellness quotient? Take this consumer-focused quiz to see where you stand and the SavvyMoney Financial Checkup tool for more financial insights.
Article by Jean Chatzky, Savvy Money. With reporting by Casandra Andrews
