They say money can’t buy happiness, is it true? The connections between money and happiness have been pondered for decades. According to LendingTree, 19% of Americans think money can buy happiness, while 70% agree it can reduce stress. Personal finances and financial planning could be tools to making your life stress free.
What Is Financial Wellness?
The U.S. Consumer Financial Protection Bureau defines financial wellness as “the feeling of having financial security and financial freedom of choice, in the present and when considering the future.” Another commonly used term for financial wellness is financial fitness.
Why Is Financial Wellness Important?
Prioritizing financial wellness can have a positive impact on many areas of your life. Creating a plan and saving allows you to relieve stress and feel more secure. Below we outline how financial wellness can benefit you and the steps to help you achieve it.
Benefits of Financial Wellness
Achieving a state of financial wellness or financial health allows you to relieve financial stress, which can contribute to elevating your overall quality of life. Living within your means and building savings will mean you’re more capable of absorbing financial shock like surprise bills. You’ll also be more capable to treat yourself to the things you most enjoy like travel. Financial wellness can also contribute to your physical health, allowing you access to things like a gym membership and healthy foods.
How to Improve Your Financial Wellness
When you’re assessing your financial wellness, it’s important to consider both your financial strengths and weaknesses. Identifying your weak spots can help you find areas where you can improve. It’s a good idea to assess your financial fitness on a regular basis so that you can use the below tactics to work towards your financial goals.
Build a Budget
According to a debt.com survey of more than 1,000 Americans found that 80% of people do budget. Plus, 88% of those budgeters said it got them or kept them out of debt. Money management practices are a good way to stay on top of your finances so you don’t fall behind. When you create a budget, it’s important to have a good understanding of where you’re spending your money and prioritize what is important to you.
Tackle Your Debt
If you’re in debt, you’re far from alone. The average American has $90,460 in debt, according to a 2021 CNBC report, which includes all types of consumer debt products, from credit cards to personal loans, mortgages and student debt. Start getting out of debt can feel overwhelming, but there are steps to take that can make it seem more manageable.
Prepare for Emergencies
Unexpected expenses come up and they can be costly. These can be relatively small like car repairs or parking tickets, but this could also be events with bigger implications like getting laid off or an accident requiring medical care. It’s stressful when you’re not prepared. Creating an emergency fund will allow you to regularly set aside small amounts of money into a savings account for those surprise bills.
Secure Your Future
When you make saving a priority now, you’re creating a secure future for you and your family. It’s never too early to think about saving for retirement. Make sure you’re taking advantage of any retirement benefits offered by your employer and consider setting aside an additional portion of your compensation toward retirement.
We Can Help
If you’re looking to take control of your financial wellness, talk to a Farm Bureau advisor who can help you map out your future and the steps you need to take to reach your goals.