If you were to ask the average employee how they would define "financial wellness", most will likely answer with some sort of comment related to how prepared one is for retirement. Yes, this is a bit of a subjective question but financial wellness is really much more than just about money in a bank account.
The definition of “financial wellness” should really include three core elements. It should cover off one's current financial situation but also take into account their knowledge and attitudes towards money and how it can be put to personal use, both in a positive and negative manner.
The first core element of financial wellness could be classified as financial health. From an employee's perspective this would include the individual employee’s "state" of financial resources and their ability to meet their current and ongoing financial obligations. In other words, what is the comparison to their current input of funds to their output of funds for the same time period. Good financial health would be a state where there is enough money coming in to adequately support their current lifestyle, with some funds left over for savings.
The second element is financial well-being. This metric can be looked at a little more subjectively and would be considered more about an employee’s attitude and "feeling" about their own financial situation, both in terms of the short and long term. Different people have different views on their own state of "well-being". Some may like to have a large portion of their income dedicated to savings while others may have more of a "spend it while you got it" attitude. The key here is that the end state for the employee is positive and is not creating stress or anxiety in their everyday lives.
Rounding out the financial wellness trio we have financial literacy. More clear cut to define objectively this would involve the knowledge and skills acquired and or needed by an employee to be able to make responsible financial decisions, along with the ability to apply that knowledge to their everyday life, again to achieve a positive state of mind and living.
Pulling these all together, a conclusive state of overall financial wellness can be more accurately stated and measured. In general a good state of employee financial wellness would be an situation where employees have the money to meet short-term and long-term obligations as well as the knowledge, skills and clear understanding of how to manage their financial affairs into their foreseeable future.
As with anything that is defined in a manner of "state", situations can change. Life is variable and the in and out flow of money goes right along with it. The point of being financially well is to understand what those changes are and what actions should be taken to either benefit from, or defend against the change at hand.