Financial Wellness: What it is and how to achieve it

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Financial Wellness: What it is and how to achieve it

“Wellness” is a word that you probably hear tossed around a lot these days, especially following the pandemic. Emotional wellness, physical wellness, mental wellness… and even financial wellness. But while the other types of wellness may be slightly more self-explanatory, financial wellness is a bit less clear.

So, what exactly does it mean?

At its most basic, financial wellness means being able to efficiently and effectively manage a healthy and balanced economic life, resulting in a state of overall financial wellbeing. Despite being rather simple in concept, financial wellness encompasses a wide variety of factors, from living within your means to being debt-free.

One important thing to remember as you set out to create a sense of financial wellness in your life is that it is a journey, not a destination. There is no one set end goal that you will be able to conquer once and for all. Rather it is about creating and sticking to smart financial habits that will keep you consistently financially stable.

Here are our top 10 tips for achieving ongoing financial wellness in your life.

  1. Be aware of your financial situation and keep track of how much money you have, any debt you have, various accounts in your name, your income and expenses, etc.
  2. Live within your means.
  3. Use a budget to stay on track.
  4. Build an emergency fund.
  5. Build your savings.
  6. Start thinking about retirement early one. Take advantage of company sponsored retirement plans, or do your due diligence and open a retirement account up for yourself.
  7. Use credit wisely. Don’t overuse it, pay your balances on time and in full, and avoid falling into debt. Also, be aware of your credit score by checking it annually.
  8. Many banks offer free services such as high balance alerts, high transaction alerts, and withdrawal alerts, in addition to overdraft protection. Take advantage of these services if you have the option.
  9. Keep financial records.
  10. Set financial goals and work towards reaching them.

Bonus tip. Ask for advice, but also listen to your gut. We’ve said it before, and we’ll say it again: At The Humphreys Group, we believe that expertise and empathy both have their own unique role to play in financial matters. While most financial advisors will tell you that emotions and investing are two things best kept in isolation from one another, we believe that anyone who focuses on one at the expense of the other is presenting an incomplete picture.

Over the years, we have seen a domino effect when clients allow their feeling to play a role in their finances: self-reflection leads to self-knowledge, which leads to self-confidence, which leads to better decisions and timely implementation. We maintain our belief that financial life planning is a holistic process, and that when your money and your emotions are in harmony, you are well on the path to creating lasting financial wellness.

At the Humphreys Group, we partner with our clients to help them live purposeful lives. Through our discovery process, we learn about you, your dreams and aspirations in order to provide our best advice and develop a financial plan that will support your overall financial wellness. Reach out to our team to continue the conversation.