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.
Sign up for Kiplinger’s Free E-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
-
How to Break Free From the 'One More Year' Trap and Actually RetireDespite having more than enough money to retire, some people simply cannot leave their jobs.
-
Stocks Swing Lower as Eli Lilly, Fortinet Spiral: Stock Market TodayThe main indexes finished well off their session highs after a disappointing batch of corporate earnings reports.
-
Five Things to Do if You're Forced Into Early Retirement (and How to Reset and Recover)Developing a solid retirement plan — before a layoff — can help you to adapt to unexpected changes in your timeline. Once the initial panic eases, you can confidently reimagine what's next.
-
Five Ways to Adapt Your Charitable Giving Strategy in a Changing World: An Expert GuideEconomic uncertainty, global events and increasing wealth are shaping the charitable landscape this year. Here are the philanthropic trends and some tips that could help affluent donors optimize their impact.
-
I'm an Estate Planning Attorney: These Are the Two Legal Documents Everyone Should HaveEvery adult should have a health care proxy and power of attorney — they save loved ones time, money and stress if a sudden illness or injury leaves you incapacitated.
-
I'm a Financial Professional: Here's My Investing Playbook for Political UncertaintyFor successful long-term investing in a politically charged environment, investors should focus on economic data, have a diversified portfolio and resist reacting to daily headlines.
-
The Truth About the Dark Side of Rooftop Solar PanelsRampant bankruptcies in the solar panel industry have left many consumers with systems that don't work and no way to get them fixed. Worse, they're being hounded to keep paying despite not receiving what they were promised. What can they do?
-
Six Big Beautiful Opportunities: Advisers' Guide to Tax and Client StrategiesHere are several ways financial professionals can help their clients maximize opportunities in the One Big Beautiful Bill Act, which extends key TCJA provisions, introduces increased deductions for people 65 and older and more.
-
Five Ways to Maintain Charitable Giving During Volatile Times: A Giver's GuideWhen the economic outlook is uncertain, charitable giving is even more important — and impactful. You can be strategic by using donor-advised funds, diversifying assets and prioritizing unrestricted gifts.
-
Avoid Medicare's 'Shadow Tax' With This Financial Expert's IRMAA-Busting TipsYou're cruising along in retirement, and then bam: Your Medicare premiums soar because your income crossed the limit. Take a breath. There could be a solution.
