What is Financial Wellness
The term financial wellness will mean different thing to different people. It is an intricate balance of the physical, spiritual as well as mental aspects of money. It is a unique combination ideal to strive towards the way we deal with our money. Financial wellness is all about understanding about your present financial situation and taking care of such situations in such a way that so that you are always prepared for any sort of financial changes. It is also about being comfortable about where your monthly income comes from and how you are using it.
Financial wellness and health can be achieved by an individual irrespective of their income level. The key consideration of financial health is that it can be created, conserved and lost. Financial heath will not just vary among individuals but it will also fluctuate with time and depending on the changing life circumstances. It is a good practice to always monitor your physical and emotional health and establish a measure to access your financial wellness.
For employers and employee, financial wellness has two separate definitions. As for employers, financial wellness is set of programs meant to improve the financial behavior and outcome of the employees, while driving business impact at the same time. While for employees, financial wellness is defined by health and not wealth. The ultimate goal of the various financial wellness programs is to perk up the financial health of an employee.
Elements of Financial Wellness
The various elements of financial warmness include-
For every individual it is important to have an understanding of how they spend to be financially well. They should understand how much they are spending on grocery, clothing, coffee shops, and so on. It is important that an individual spends more than what they are actually earning so that they can set aside a part of their income towards saving and to eventually achieve their financial goals. Spending more than what you are earning can get you into debt, which can be an obstruction to achieving the goals.
Planning for any sort of financial emergency is the key element of financial wellness. Financial experts from all across the world recommends that one should save at least 3 to 5 months of income in a separate bank account for financial emergencies. Without enough savings in hand it can be absolutely difficult for you to deal with any sort of unexpected expenses. Having no money on hand can undo all the positive financial behaviors that you have made in the past.
Another important key component of financial wellness is guidance. The market today is full of products and services, all designed to separate you from your hard earned money. All we need is a trustworthy source of information that will guide you toward the right decisions. Laying hands on the product that is not right or that you are not exactly in need of can affect your financial health.
Employees are provided with various benefit programs. But many still struggle to understand them and how they can use such benefits effectively. Therefore, to be financially well, it is important that you understand the benefits first and be able to make the most of them.
It is important to have a long term investment plan and diversified portfolio in order to build wealth. Thus, you should understand what to invest in and what you should avoid to maximize your financial wellness. It can be difficult for you to know whom to trust and how to invest. So, it is important to first understand how to invest your money to become successful.
Once you understand and conquer all of these important elements of financial wellness it can be easy for you achieve your financial goal. Therefore, whenever you create a financial wellness program, all of these elements should be addressed.