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Your Guide to Maintaining Financial Wellness

Personal Finance
Confident Bankers Looking to Review Financial Wellness

Money may not be able to buy happiness, but there's a growing body of evidence that it may help. Research by the Money and Mental Health Policy Institute found that financial difficulties can lead to increased stress and anxiety.

What Is Financial Wellness?

The opposite is also true. Financial wellness — which is defined as having a positive relationship with money — can make you more confident and productive. Adhering to financial wellness tips means you may be better prepared for unforeseen crises, as well as having the ability to achieve short- and long-term goals, whether it's buying a new house or retiring by a particular age.

Why Is Financial Wellness Important?

Just as physical well-being typically requires having a plan, so too does financial wellness. Even if you're not where you aim to be today, knowing you're on the right path can help to alleviate unnecessary emotional strain. Financial wellness is measured by how well you manage your money.

Performing a detailed self-assessment every quarter or at least every year can help to keep you moving in the proper direction.

How Do You Achieve Financial Wellness? 5 Questions to Ask Yourself

The first step toward improving your financial situation is getting a clear picture of it. Here are five questions you'll want to ask yourself:

1. Are You Prepared for the Unexpected?

A good rule of thumb is to have an emergency fund that can cover three to six months' worth of expenses, but even that may not be enough to handle worst-case scenarios. Carrying health insurance means you may not have to worry as much about unforeseen accidents or illnesses. And if you have dependents, taking out disability and life insurance policies can help to ensure that your loved ones are taken care of if something should happen to you.

2. Are You on Track to Save Enough for Major Life Goals?

Buying a new home or paying for your kid's college tuition are expensive propositions, but they don't have to be stress-inducers. Having a savings plan and sticking to it can help you stay in good standing and meet those longer-term goals.

3. Is Your Retirement Account on Track?

The size of your retirement savings account will depend on when you leave the workforce and what lifestyle you plan to lead afterward. But an analysis by the Center for Retirement Research at Boston College found that a typical middle-income earner will need to put away 10% of each paycheck to retire at age 65, if one begins investing in his or her 20s. If you're a late starter or hope to retire early, you might want to kick in a bit more to your 401(k) or IRA.

4. Do You Stick to a Budget Every Month?

No matter where you are on the income scale, it's important to maintain a budget so you stay within your means. The most important idea is to find a method that works for you.

5. Do you have a plan for managing "bad debt"?

While a mortgage can be considered "good debt," revolving credit card balances and other high-interest debt can become a barrier between you and your financial goals. Among the most important financial wellness tips? If your credit cards are becoming a problem, get rid of most of them and develop a game plan to pay down your existing debt.

Financial Wellness Tips

Some people are more comfortable managing their own finances than others. If you feel unsure about your overall financial direction, contacting a knowledgeable financial professional may help you identify strategies that can help strengthen your financial well-being.

You may also want to enroll in a financial wellness program at work, which an increasing number of employers now offer. These courses typically help workers develop positive habits, such as maintaining a budget and paying down harmful debt, as well as teach them how to save for retirement and other long-term needs.

The Bottom Line

In the end, though, only you can make the goal of financial wellness a reality. By increasing your financial literacy and periodically measuring your progress, you'll be closer to a happier, more confident tomorrow.

Maintaining financial wellness may not only help ensure you're in good standing in the future — it can also help provide peace of mind for today.

Next Steps

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Information provided is general and educational in nature, and all products or services discussed may not be provided by Western & Southern Financial Group or its member companies (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. Consult an attorney or tax advisor regarding your specific legal or tax situation.