A Complete Guide to Managing Your Money: What Is Financial Wellness?

Some people say money is the root of all evil, but did you know there’s something called “financial wellness?”

Money doesn’t have to be at odds with your well-being. For example, if you’re constantly struggling between wanting to save money and spending money on a hobby you enjoy, you might see money as an obstacle. With some proper money management, though, you can set aside enough money every month to give yourself the freedom to do what you want with it.

Interested? Asking yourself, “What is financial wellness, really?” Well, keep reading to find out more about what financial wellness can do for you.

What Is Financial Wellness?

The word “wellness” in “financial wellness” might tip you off to what it’s all about. While taking charge of your personal finances can help you maintain and grow your money, financial wellness is more about how this affects your wellbeing.

Some people might like to forget about money when they think about their personal life, for good reason. But especially when you’re broke or on the verge of broke-ness, thoughts about money are something you—literally—can’t afford to forget. As the Wu-Tang clan told us back in 1993, cash rules everything around us.

So financial wellness is a way to acknowledge that money has an effect on our wellbeing in a way that still prioritizes that wellbeing over the money aspect. Through the concept of financial wellness, we can see financial stability as a way to help us get to better places in our personal and emotional lives.

Debt-Free Living

If you have student loan debt, credit card debt, or any other kind of debt, this is likely the biggest thing you think of when you think about your financial situation. A financial wellness goal, then, could be getting debt-free.

While it might seem impossible right now, there are several things you could do to work toward that goal. Keep reading for one way you can start moving toward freedom from debt: creating and maintaining a budget for your expenses.

Living by a Budget

One way to get further along your path to financial wellness is to live on a budget. Of course, part of this also assumes you would have a steady enough income to be able to budget things in advance.

But even if you’re in a stressful financial situation, setting a budget for your everyday expenses can give you a bit of peace of mind you might not have otherwise had. You can use an online budget planner or just use your computer’s spreadsheet program. Use your expenses from the past month or so to inform how much you should set aside for housing, bills, food, and other expenses.

You might think budgets are restrictive, but they can actually help remove some guilt from your experience spending money. 

Financial Independence

For some people, the first step in financial wellness is financial independence. Whether you just moved out of your parents’ home or you got out of a relationship that was providing you with financial resources you no longer have, financial independence is both a scary and freeing thing.

Relying on yourself for all your bills and expenses can help you avoid dependencies that put too much control in the hands of other people. When you owe people money or depend on assistance from them to go about your daily life, this can influence your decisions and prevent you from feeling truly free.

Building an Emergency Fund

You may have enough money saved up for this month’s rent, but what happens if you or someone you take care of gets sick? Or if you suddenly need to stop working for a little while?

If you have a solid emergency fund, money will be one fewer thing to worry about when disaster strikes. Some people say you should save up six months’ rent in your emergency fund, while others recommend more or less. What’s really important is to have an emergency fund at all.

Not everyone has the immediate means to start saving up for this kind of thing, but it could be an important next step on your path to financial wellness.

Financial Wellness and Mental Health

And this brings us to mental health. For many people, financial well-being is just one part of a larger effort towards mental stability and wellbeing in general. If you’ve ever been broke or in debt, you know that thoughts about money can take over your mind during these times.

Financial wellness can mean different things to different people, but one goal you might have could be to think about money less. By setting up budgets and figuring out how much money you’re getting, spending, and borrowing from various places, you can avoid day-to-day worries about whether you’ll have enough at any point.

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Financial Wellness Programs in the Workplace

Now that the concept of financial wellness has gotten more popular than in the past, some employers will include financial wellness programs in their policies. These can include on demand pay and assistance with school tuition.

Programs like these are both an effort to boost morale and a way to make sure that workers don’t fall behind due to financial stresses. The fact that an employer cares about the financial well-being of employees can tell prospective applicants a lot about whether they’ll enjoy working for that organization.

Get Started on Your Path to Financial Wellness!

So, what is financial wellness? The answer depends on your ideal wellness goals.

Maybe you’re saving up for something you’d love. Or your goal might just be to stop stressing about money so much. What’s important is that the focus is on getting ahold of your wellbeing.

This is a gentler and more friendly way toward money management than “save money because it’s important.” When you think through the lens of financial wellness, you can understand on a deeper level why money might be important to you.

And if you want to learn more about your personal finances and money in general, check out the rest of this site!

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