Put simply, financial wellness is having a solid outlook on your monetary future. It does not imply that you have tons of cash in the bank, but rather that you are currently and planning on into the future, able to meet all your monetary requirements.
The following 4 areas are often considered as the key foundational components of Financial Wellness:
1. Savings
Everybody ought to have savings. The most straightforward method for setting out on a savings plan is to have a small portion of your income deducted on each pay cheque and deposited into a savings account. You can do this yourself on each pay day but there are also ways to have this activity set up automatically so you never have to worry about missing a contribution.
Side bar to savings.. the Just-In-Case Account or Emergency Fund
Nothing is more distressing to financial well being than an unexpected bill. Maybe your car has broken down or your dishwasher quit working and suddenly you have quite a large bill in your hands. The popular train of thought on this is that an emergency fund be sufficient to cover three to six months of living expenses, including mortgage payments or rent, utility bills and groceries.
2. Financial Education
The earlier you get familiar with the essentials of how financial planning functions, the more certain and fruitful you'll be with your financial wellness down the road. It's never to late to begin learning, however the sooner you start the more advantage you'll have for the future. As they say, time is money. The initial steps into financial wellness should always start with educating yourself. The more you know the better you will do. It's usually that simple.
3. Retirement Planning
Anticipating your financial needs once you quit working is crucial.
Everyone wishes that the first day they started work they began to put a modest quantity of cash into their Retirement Savings each month. For most of us however this is wishful thinking. But not to fret, you still have time to plan for your future. Just keep in mind that over time, whatever you're able to set aside will accumulate and continue to grow. The power of compound interest is very strong. Compound interest is a good topic to do some research on so you can fully understand how and why long term investments can really pay off. Again, the more you know the better you will do.
4. Budgeting
This one is the hardest of the 4 because it takes ongoing work and personal attention. We all have experienced the whimsical venturing into our wallet for the old credit card only to be surprised by a larger than expected bill at the end of the month.
The key aspect here is that once you know where your normally spending your money you can adjust and evaluate items that perhaps are not needed. This will allow you to establish a foundational monthly budget and as time goes on you can further monitor your expenses to make sure you stay on track and can put money aside into savings or perhaps some growth based investment instruments such as ETF's or stocks.
At Benefi, we work with employers to embed Financial Wellness Programs directly into overall employee benefit programs. We understand that Financial wellness is the #1 factor that dictates overall employee wellness.
Our focus therefore is straight forward. To help employees achieve ongoing financial stability. To educate and empower people and help them create healthy financial habits that become a lasting part of their life, at work and beyond.