You work out for your physical wellness, you eat right to maintain internal wellness but what are you doing to improve your financial welfare? By definition, financial wellness is the ability and understanding of successfully managing financial expenses. This concept revolves around the sense of feeling financially secure and free in the present day and future. Those who have achieved financial wellness are typically healthier, more focused and are even more productive in their everyday work.
A Stress in America poll conducted by the American Psychological Association found more than 6-in-10 (62%) Americans felt money is a significant source of stress in their lives. Yet, when we think about the moment financial stress typically began, you may remember back to when sticking to your financial goals you bought your first car or when you were determining how to pay for college or trade school. Whatever your initial topic of money concern was, it was probably in your high school years.
During the summer of 2018, Cengage conducted a survey examining the impact of “financial sickness” in college students. Their research found 85 percent of current or former students felt high financial stress when it came to affording required class materials, compared to the 88 percent of students who were stressed to pay for tuition. With the majority of Americans and college students feeling a sense of financial illness, what are possible prescriptions?
Creating a strong financial foundation
A quick course in financial education is not enough to change an individual’s money management. The core of financial wellness is a sense of “well-being,” feeling that you have a strong enough financial foundation to execute the actual financial behaviors that necessary to reduce primary money stressors.
In 2018’s Teens & Retirement survey, Junior Achievement (JA) revealed more than two-thirds (69%) of teens know little or nothing about financial planning. In fact, 30 percent of those ages 13 – 18 reported that they felt $5,000 or less was enough to retire on. These findings highlight the importance of establishing short-term and long-term goals at a young age to jump-start financial thinking. As financial wellness not only looks at today but what lies ahead, it’s crucial for youth to work towards a goal. Goals create accountability, as well as a reason to continue persevering through challenges that one might face in the future they also reinforce an individual’s budgeting plan.
In the same 2018 JA survey, almost half (46%) of teens reported that they are not confident in their ability to plan for retirement. Financial attitude translates to how one feels about money that impacts their spending. The way an individual understands what is a need or a want directly impacts their behavior, for example. To beat the bad financial bug, take time to look over your monthly finances, determine if what you are spending money on is beneficial or a deterrent from your goals. The sooner you can identify unnecessary spending, the faster you can reach your future money-milestones.
Tools & Resources for Financial Wellness
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