What do finances have to do with wellness?
When we say the word "wellness", finances are not typically the first thing that comes to mind. We usually think of maintaining a healthy diet and exercising regularly. However, wellness is not limited to our physical health and wellness. There are many components of wellness, and finance is one that is often forgotten. Planning for the future by setting and achieving financial goals can greatly improve your overall health.
According to MarketWatch, money is the number 1 stressor for Americans, regardless of the economic climate.
What is financial well-being?
- Security - Financial well-being allows people to make the most of their lives, and enjoy more time with friends, family, and travel more. Financial security means something different to everyone, but typically it can be defined as the ability to go through your day to day life and activities, without actively stressing and worrying about money.
- A Spectrum - As mentioned before, financial security is not a static thing. There are many different levels of financial security, such as having control over daily spending habits, the ability to not become financially unstable due to an emergency expense, and working towards long term financial goals (such as retirement or buying a home). As you move through the spectrum, your level of financial stress decreases and you gain freedom to spend money on what makes you happy in your life, not just your immediate needs.
- Freedom - Many people who suffer from financial stress feel trapped and restricted from doing things because of their financial situation. And when we define financial wellness, we tend to think of the freedom from constant stress and the freedom to make more choices with your money.
What is the right level of financial freedom to strive for?
Many people tend to make overly ambitious goals for earning and saving money, which is counterproductive in terms of financial wellbeing. While it is definitely a smart move to save money, if you save too much of your income, you may become stressed and worried over your daily expenses and bills. One way to combat this is to remember that you do not need to be "rich" to have financial security and well-being. Depending on the cost of living in your area, beyond a certain amount to live a comfortably, excess money has a diminishing return on our happiness.
5 Steps to Take Towards Financial Wellness
1. Attend any seminars, webinars, or free workshops at your workplace that offer financial planning and education
2. Set small personal financial goals to help you make progress toward your long term goals (Such as only buying coffee once per week rather than 3 times per week, and putting the extra money towards a car fund)
3. Take some time to identify your own motivation for why you want to improve your financial well-being
4. Begin monitoring exactly where your money is going and checking your bank account often to ensure there are no surprise charges, such as an old subscription, and that your money is going where you want it to
5. Don't forget to reward yourself as you achieve small goals and make progress towards financial wellness!