Too many people neglect financial wellness as part of their holistic health and well-being agenda — even though the evidence shows that financial stress contributes to a decline in both mental and physical health. As we head toward fall, now is the perfect time to take a step back and assess our financial health and well-being.
Real-world factors like rising inflation and sky-high interest rates, paired with the public’s general anxiety surrounding economic uncertainty, are causing Americans to experience financial stress at overwhelming levels. In fact, the percentage of Americans who said they experience unmanageable levels of financial stress climbed by 34% in 2022, according to workplace financial wellness provider Financial Finesse.
Recent surveys have found nearly half (48%) of employees point to financial concerns as the cause of poor mental health and that financial stress negatively impacted their sleep, physical health and relationships at home. It’s no wonder that last year the percentage of Americans who would describe their mental and/or physical health as good or excellent fell to an all-time low.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
However, the cards are not stacked against you. By prioritizing financial wellness the same way you would prioritize other areas of wellness, it is possible to reverse the mental, physical and financial costs of financial stress.
How to foster financial wellness
First, let’s identify what “financial wellness” even means. Financial Finesse, which coined the term in 1999, defines it as a state of financial well-being where a person maintains a manageable level of financial stress, a lifestyle below their means, an emergency savings fund, no high-interest debt, a sufficient insurance and estate plan and an ongoing plan to reach their future financial goals.
That sounds like a lot, but it’s really about getting your financial foundation in place. Here are three important places to start:
- Revise your money script. This subconscious set of attitudes, beliefs and values influences virtually all of our financial decisions, oftentimes without us even realizing it. By assessing how your family, culture and overall experiences have shaped your ideas about money, you’ll be able to identify key lessons — both positive and negative — and reevaluate how you think about and view money.
- Establish your financial identity. There are several types of financial identities, ranging from the investor to the giver, the planner to the bargain hunter. Adopting an identity according to your values will reduce the emotional burden of money and help orient your financial decisions.
- Figure out what drives your personal success. Researchers call these “bright spots,” and they can be harnessed toward accelerating your financial progress. Applying lessons learned from your greatest successes to your financial goals will keep you motivated to stick to your plan, find reward and satisfaction, and take you further in your financial wellness practice.
Immediate steps to get on track
While you work on building your financial foundation, there are a number of tactical steps you can take right away.
Set a budget that you will stick to, while also reviewing and revising it periodically to align with any lifestyle changes. Budgeting can sound overwhelming, but it is the first step toward reducing financial stress.
As part of that budget, make sure to create an emergency savings fund. Typically, your emergency fund should have three to six months of living expenses to keep you going in case of an unexpected financial challenge. If you don’t have the extra cash lying around, start slowly to build up this nest egg.
Staying organized throughout this whole process will also alleviate financial strain. Automate your finances where possible to make reviewing your investments and assets easier than ever before. You can make use of countless websites and apps to keep a handle on where you stand financially.
Lastly, be open to asking for help throughout this process. Seeking the advice of a professional to guide you is not only reasonable, but it may even be included as part of your employer’s benefits package. Enlisting the support of an unbiased financial coach will make financial wellness even more attainable.
The stats show that wellness is something we can all work on this fall. Take a few minutes to assess your financial foundation and see which areas need some extra TLC. Growing your financial wellness will continue to pay dividends, far beyond this fall.
related content
- Financial Wellness Is Self-Care: Three Steps to Help Improve Yours
- Your Money Mindset Forms by 7: And the Gift Keeps on Giving
- Common Financial Weaknesses and How to Overcome Them
- Six Ways to Improve Your Financial Wellness
- Improving Your Financial Health: A 10-Step Workout Plan
-
Dow Hits New Intraday High on Fed Day: Stock Market TodayNot even the most important stock in the world could keep the oldest equity index down on a significant day for markets.
-
Savings Goal CalculatorTools Want to know how much you need to save each month to reach your financial goals? Our calculator helps you build a realistic savings plan.
-
Gray Divorce Can Throw Your Retirement a Curveball: What to KnowIf you're entering retirement and going through a divorce at the same time, you've got some work to do to shore up your long-term financial security.
-
I'm a Real Estate Investing Expert: Optional 721 UPREIT DSTs Can Be the Best of Both WorldsBefore investing in any 721 UPREIT exchange, look for one that offers a straightforward, investor-friendly exit.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client ReviewsFinancial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop InvestmentsTruck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary FormsStandard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams NowBeyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on RetirementWhile some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.
