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National Financial Wellness Month

January Is National Financial Wellness Month

What is financial wellness? Financial wellness is a state of being in which you can meet current and future financial obligations, feel secure in your financial future and make choices that let you enjoy life. Financial wellness can also reduce preoccupation with money needs and improve your mental and physical well-being.

Consider now a good time to review your big-picture financial situation and future goals. It's also a good time to get organized for the upcoming tax season. If you have one, consider connecting with your Fiduciary financial professional to discuss if your financial planning needs any adjustments or changes based on your lifestyle.

Defining "Financial Wellness" for you.

This might drastically vary from person to person. It is informed by who you are, where you are headed and what your prior experiences with money are. A person who has had serious financial troubles in their life might have different expectations from a person who has enjoyed relative financial stability.1,2

How to define this? Ask yourself what you need to feel secure, financially speaking. Here are some tips/questions to consider:

  • How much should you have saved for in emergency funds? 
  • How much income should you be saving  each month towards future goals? 
  • Where are you at with your debt? Would things be simpler if you carried less or better-structured debt.
  • How fluid is your cash flow when it comes to expenses that are not urgent (taking your family out to dinner or on a small trip) versus larger financial goals (such as a home renovation or expensive vacation)? 
  • Finally, and perhaps most importantly, will you be able to retire at your target age with sufficient resources?

Financial Wellness Goals

Thinking about financial wellness is often a matter of setting goals for what you can accomplish now and what you can work on to make it a part of your larger financial strategy. For now, consider taking some of these actions:3

  • Have a values-based conversation with the decision-makers in your household, meaning any tax-paying adult who contributes income and shares responsibility. This could be your spouse or a family member. Make sure that the things you are spending money on lining up with your commitments to meet your financial needs.
  • Consider automating payments, especially towards your regular items, including home loans, credit cards and other installment payments.
  • Creating an emergency fund reflecting 6-12 months of household expenses will afford you a stable foundation going forward. If that seems too ambitious, build the fund a month at a time until you reach your goal.
  • Make regular contributions to your retirement accounts. Take advantage of any matching contributions you might get from your employer. 
  • Make long-term financial goals. If you are thinking in terms of buying a house, for instance, let that guide your overall financial strategy. 
  • Do you have a lot of debt? Is becoming totally debt-free an achievable goal? It can be, if you make it a priority. That said, being totally debt-free may be a difficult task for many households. For that reason, it may be better for you to focus on your other goals first and make debt freedom a target for a later date: for example, being debt-free in 10 or 20 years.

These are, of course, not hard and fast rules. As mentioned above, every individual has their own specific definition of financial wellness. Some of these examples might feel like a long reach. Others, you might already be practicing. The good news is that with careful practice and judicious scrutiny, many people can gain a feeling of satisfaction and even pleasure from maintaining financial wellness.

Having your financial strategy in place not only can mean a great deal to you in the long term but also may provide you some comfort in the short term. Schedule a time to discuss this with your trusted financial professional today.

  1. https://www.forbes.com/sites/riankadorsainvil/2020/04/21/steps-to-financial-wellness-during-financial-literacy-month/?sh=32a176133346
  2. https://www.cnbc.com/2021/01/21/12-month-roadmap-to-financial-wellness.html
  3. https://www.moneymanagement.org/credit-counseling/resources/financial-literacy-month

This content is developed from sources believed to be providing accurate information, and provided by Meenes Wealth Partners. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered financial advice or a solicitation for the purchase or sale of any security.