January Is Financial Wellness Month
January is Financial Wellness Month, a time to remind people to plan and update their financial strategy.
It’s a great time to discuss your financial situation and aspirations for the future. It’s also a good time to connect to see if your financial strategy needs any adjustments or changes based on your lifestyle or changes in goals.
Defining Financial Wellness
The first thing to do is define what “financial wellness” means for you. This might drastically vary from person to person. It is informed by who you are, where you are coming from and what your experiences with money are. A person who has had serious financial troubles in their life might have different expectations from a person who has enjoyed relative financial stability.1,2
How, then, to define this? First, ask yourself what you need to feel secure, financially speaking. Here are the questions to consider:
- How much should you have in investments?
- Where are you at with your debt?
- Are you on target to reach your asset goals?
- How fluid is your cash flow when it comes to expenses that are not urgent versus larger financial goals?
- Finally, and perhaps most importantly, will you be able to get to your financial independence by your target age?
Financial Wellness Goals
Thinking about financial wellness is often a matter of setting goals for what you can accomplish now and what you can work on to make it a part of your larger financial strategy. For now, consider taking these actions:3
- Have a values-based conversation with the decision-makers in your household, meaning any tax-paying adult who contributes income and shares responsibility for the bills. This could be your spouse or a family member. Make sure that the non-essential things you are spending money on lining up with your commitments to meet your financial needs. This is not a “stop getting lattes” conversation; it is a “are we spending money on the things that matter?” conversation.
- Consider automating payments, especially towards regular items, including student loans, credit cards and other instalment payments.
- Make regular contributions to your retirement accounts. Take advantage of any matching contributions you might get from your employer.
- Make long-term financial goals. If you are thinking in terms of buying property, for instance, let that guide your overall financial strategy.
- Is becoming totally debt-free an achievable goal? It can be, if you make it a priority. That said, being totally debt-free may not be a consideration for all assets.
These are, of course, not hard and fast rules. As mentioned above, every individual has their own specific definition of financial wellness. Some of these examples might feel like a long reach. Others, you might already be practising. The good news is that with careful practice and judicious scrutiny, many people can gain a feeling of satisfaction and even pleasure from maintaining financial wellness.
Having your financial strategy in place not only can mean a great deal to you in the long term but also may provide you with some comfort in the short term.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.