Financial wellness involves and achieves independence. No matter how much one works and earns as income, being tied down by debt and commitments provides no real freedom. Financial wellness works the same way as wellness for the body; when everything is working correctly, and there are no concerns, a person is healthy. When vulnerabilities, leverage, debt, and financial stress cause losses and struggles, the body becomes sick and can’t perform as well. Most people in the U.S. today are not in a healthy financial state. There’s no surprise in the statistics that most households have more debt than a third of the income they earn in a year. However, it is reversible with a financial plan, and for those who have found ways to achieve financial wellness, the results are amazing on how their lives have improved as well as their overall outlook for the future, reduction of stress, and control of what comes next.
Starting off, however, things might seem overwhelming, even like looking at a tidal wave from the bottom of the sand and wondering how in the world you will get out of that financial problem. Folks are in crowded company as people from all backgrounds are in the same boat. However, since 2008 when the big real estate-driven recession hit, FinFit has been guiding people proactively toward better financial futures and financial wellness. That includes being able to proactively manage savings, spending within a budget, and borrowing intelligently versus just as a stopgap. So, the first big step for anyone is to realize a financial problem exists, be honest about it, and then take action with FinFit to do something about it.
Financial well-being consists of several building blocks, but some people confuse it with simply being able to buy things. People start working early to gain income. As people earn more, their cost of living goes up. At a certain point, a person has to decide to borrow to achieve the things that help a person step up in life. While there is good borrowing, it’s not defined well, and many start borrowing heavily the wrong way. That’s when the common trap occurs, as people get stuck in heavy loads of consumer debt, credit card debt, loans to pay off loans, and similar. At some point, a person realizes every dollar being earned is going to pay a debt, and something needs to happen quickly before it becomes too much.
In reality, financial freedom is far more complex. Financial health includes income to get through the month, managing a budget effectively, saving for big needs or emergencies, short-term investing and long-term or retirement savings, and capital expenses like a home or a car. Every component makes up a specific mix for a person and their individual financial health. No two people are exactly alike, but there are a lot of commonalities that create the ability to show people what works and what doesn’t in most cases. So let’s break it down to understand these building blocks better:
Poor financial decisions made without forethought produce even more problems. When people prepare, plan and execute financial decisions intelligently, the outcomes are far more positive and effective. That said, life is full of surprises, and they too can cause things to take a turn for the worse. Planning and preparing for such risks versus just waiting for them to happen also helps avoid becoming headaches and financial disasters people can’t dig out of later on. Examples include unexpected illnesses, accidents, legal issues, tax mistakes, and similar.
Instead of operating blindly, those with healthy financial wellness plan for tomorrow and into the future. They don’t settle for what works for just the year; they have details and goals in motion for the next five, ten, and twenty years. That’s because financial well-being is an ongoing practice. It involves creating a personal plan and repeatedly updating it as things change, new opportunities arrive, and initial goals are achieved.
The first challenge is the current status analysis. That means taking an honest look at your financial habits right now using bank statements, income documents or pay stubs, credit reports, credit card bills, loan statements, and a listing of any assets owned. This is critical for understanding a person’s current starting point and what needs improvement. Married couples should include both personal pictures, not just one partner alone. Try not to hide anything either. It won’t do anyone any good, and the missing information can easily skew the total picture of one’s current status.
Next, a financial planner needs to review the materials collected objectively and then identify the vulnerabilities. That means clearly evaluating a person’s spending habits, critical expenses, and discretionary costs versus their income and what can change for the better. Sometimes the advice can be focused on squeezing down on unnecessary expenses. For others, it may very well be needing to get a second job for a bit to move ahead and get rid of debt. Everybody’s case is different depending on what they need to do to achieve financial wellness.
Finally, with a full picture and a clear idea of the alternatives available, a budget plan can be developed that effectively protects income, addresses necessary expenses, avoids waste, and begins to make progress toward real financial goals and a strong future. In short, it’s the big step toward taking control again.
In short, the answer is yes. You are not alone if you feel that your financial situation is unworkable, that you’re helpless to make any real headway. Financial accomplishments don’t happen like Vegas — a big win in one day. Instead, they take persistent work every day and improve over time. In some regards, our educational system has shortchanged people by not providing a viable financial education along with everything else people need to learn to function in society. So, as a result, most people get lost.
The initial basics of moving toward better financial health are well understood: pay off credit cards, get rid of or refinance big loans for better terms, cut spending, and earn more income where possible. However, that’s not the whole picture. Retirement plans, education, long-term savings, and ongoing spending habits are essential as well.
Consider the possibilities:
All these items above and many more can be realized with help from a professional financial advisor geared toward improving financial well-being.
Your goals are your own, but a financial planner can help verbalize them into realistic targets that make sense and are doable. That includes plans and steps utilizing investment options to effectively wipe out debt and realize control of one’s financial future. Realistic goals include:
FinFit’s unique program and financial services are designed to maximize financial wellness from a holistic perspective versus just singular components, like resolving debt alone. With a goal-oriented approach, FinFit advisors help people craft realistic paths that can be put in action from day one to produce positive results by progressively working toward financial independence.
In short, what does financial wellness mean to you? Take control of your life’s financial direction and take action on improving your financial situation.
Connect digitally with FinFit’s online form or talk in person via 1-888-928-7248 and kick off your transition to financial wellness for your future. Financial wellness programs work. Fix your personal finance today instead of waiting for tomorrow. Employers, call us for employee financial wellness as well.