If you’re like many of us, when someone asks how you are, you might offer a common response: “I’m well, thanks.” That may or may not be entirely true, given all that’s happening in your life. In a slightly different scenario, what if someone asked about your financial situation? Can you say it’s going well—and would that be true?
Fact is, financial wellness is directly related to overall well-being. According to the American Psychological Association, 62 percent of Americans report experiencing stress related to money. And it’s no wonder, given that the Federal Reserve Board has found that four in 10 Americans don’t have enough cash on hand to cover an unexpected $400 expense. Add to that high levels of student loan or credit card debt, health care costs and little to no retirement savings, and you have a recipe for significant stress that affects your body, mood and behavior.
The good news is that there are some simple steps you can take not only to increase your financial security now and in the future, but also to reduce stress related to all things money. Here are just a few.
Know that you’re not in it alone. Increasingly, company leaders are becoming aware that financial concerns impact employees’ well-being and decrease their productivity at work. That’s why many organizations now offer tools that help with various aspects of financial planning. Check to see if your employer provides tools that assist with the suggestions that follow. If not, do an internet search to find solutions that work for you.
Establish a monthly budget. This is a key component of financial well-being, but it’s often overlooked—and avoided. Rather than thinking that a budget is something that restricts you, reframe your perspective and see it as a tool that enables you to enjoy life more. When you understand what you have coming in (income), what you have to pay out each month (expenses) and what you have left, you’ll have a better idea how much you can put aside for savings, retirement and fun.
Save on autopilot. Employers often allow you to have a certain amount deducted from each paycheck that is automatically contributed to a 401(k), health care expense or savings account. If any of those options is not available, check with your financial institution to set up automatic transfers to such accounts. You’ll need to review these amounts regularly to ensure you’re still on track with your overall financial plan, but not having to remember to put money aide each month will help provide peace of mind and reduce your to-do list.
Consult with a financial advisor. When there are so many moving pieces in your financial picture, it can feel challenging to know where to focus your efforts. A financial advisor can help you sort out how it’s best for you to accomplish your short- and long-term goals, and help you stay on track toward achieving them.
Whether or not you currently find yourself in a state of financial wellness, slight shifts in what you’re doing and how you’re doing it can make a big difference in effectiveness. By taking some simple yet proven steps, you’ll keep yourself moving in the right direction and enhance your overall well-being.
Lisa Taranto Schiffer
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