What is Financial Wellness?
Financial wellness is a term used to describe the state of one’s personal financial situation.
There are many dimensions to financial wellness, including the amount of savings you have, how much you’re putting away for retirement and how much of your income you are spending on fixed or non-discretionary expenses.
Financial wellness allows the individual the ability to pursue opportunities due to the stability of having a day-to-day financial system, which includes the capacity to spend, save, borrow, and plan. There are three main categories that you can use to define and measure your financial health:
- Healthy: Individuals exhibit positive financial behaviors that will allow them to be resilient and on track for long-term financial success.
- Coping: Individuals exhibit some positive behaviors but also experience challenges that require significant behavioral change to reach long-term success.
- Vulnerable: Individuals exhibit poor financial behaviors, are struggling and require immediate assistance and behavioral change to adjust course for long-term success.
Financial wellness has a plethora of benefits, especially when offered as a program in the workplace. Financial wellness can help employees find balance and control over their finances, throughout their lifetime.
Improving employees’ financial wellness can lead to healthier employees, help to reduce absenteeism and decrease turnover rates while raising employee satisfaction and morale.
There are many benefits when it comes to financial wellness and wellness programs. To be successful, these programs need to do more than just provide education but need to result in employees taking appropriate actions that lead to financial success.
Financial wellness is…
- A lifestyle
Financial wellness is NOT…
- Education only
- A sales channel