Four Wellness Tips to Help You Value Financial Health
Updated: Jun 1, 2020
Finances don't have to overwhelm you. Give yourself some space to learn and arm yourself with four easy guidelines.
As a community, we've compartmentalized health into two categories: physical activity and nutrition. Since good nutrition factors prominently in health, as does physical activity, this makes sense. Yet, while these components of physical health support your overall well-being, they only comprise one piece of the puzzle.
Yes, believe it or not, I'm saying that there's more to overall wellness than kale and kickboxing.
"There's more to overall wellness than kale and kickboxing."
To illustrate my point, let me ask you a few questions. Have you ever...
… slept poorly and felt like your brain was half-asleep all day?
… got sick after a particularly stressful time in life?
… had something happen at home that distracted you all day at work? Or vice versa?
... experienced physical nausea after a getting a large credit card or utility bill?
… felt so energized when something went well that it made you want to do it again?
…took a quick break to walk around and felt more focused when you returned to a task?
There's no denying it ⎼ our overall well-being is inextricably tied to other areas of our lives, not just your workout schedule or food preferences.
The Institute for Integrative Nutrition Health Coaching (IIN) created a wellness wheel called the Circle of Life, which details all the areas of Primary Food, or the things aside from edible foods that "feed" you, body, mind, and soul.
At first glance, you might think that some of these items don't directly impact wellness, but take a moment to consider how you'd rate each of these areas. (After you read this article, click on the image above and complete the exercise.)
What's one area that you would have liked to rate higher. Is it an area that's really meaningful to you? If so, you may feel some level of stress associated to your rating. Stress ranges from mild concern or temporary frustration to significant and distracting anxiety, and beyond. While acute stress helps keep us safe (e.g., running from tigers), research shows that chronic stress significantly affects the body overall, wearing down the immune system, increasing fat storage, slowing the metabolism, and more.
Take Your Financial Pulse
Very few things are as stress-inducing as conversations about money.
Since money is necessary to fuel daily life, money woes generate significant stress for many Americans. While I don't necessarily seek conversations about finances the way a financial planner or CFO might, the importance of addressing, understanding, and managing finances is not lost on me. As a professional outside the field of finance, I've had to work through the process like many of my clients. From numerous conversations with financial gurus, extensive research, and life experience, I've cobbled together these five tips to increase your personal financial well-being.
Before you're able to get a handle on your finances, you need to determine how much money you have, how much money you owe, and where all your money goes.
When we first got married, my husband would set up a spreadsheet each month with our income, how much we owed, and our monthly fixed and variable costs all listed. With all of the numbers in one place and tallied, there was no denying that my "not-so-tiny" Target habit was a problem. Along with some other frivolous spending and tendencies to put things on credit, my habits were keeping us from making a significant dent in our credit card debt. We basically lived check to check instead of deciding to be purposeful with our money.
Once we clarified the trends in spending, we sat down and determined how to allocate our income to avoid the pitfalls we had unknowingly fallen into. In creating a budget, we ensured the money would cover our needs, our savings, and enough wants to help us enjoy life a little. Predictably, our quality of life went up, too. Both of us knew that our financial behaviors were leading us to where we wanted to be in the future.
Which brings me to the next point, which is...
Start with Your Goals
As my good friend, the Director of Finance, US Treasury at Bayer Corporation, suggests, "start by asking 'what is my goal?', then back up from there to create a plan to support it." It's truly difficult to plan your lifelong journey without knowing where you want to end up. (Have you ever tried to vacation that way? You might enjoy the ride, but who knows where you'll end up!)
Instead, specifically decide where you want to land. Are you setting a long-term goal (such as, "by the time I retire at age 65, I would like to have $1M in savings and retirement funds)? Or a short-term goal (for example, I'd like to pay off my $10,000 in credit card debt in 24 months)? No matter the goal, the structure of making it SMART is the same:
be specific (S),
ensure it's measurable (M),
make it achievable (A),
select something relevant (R), and
put a time frame on it (time-bound, T)
There are numerous ways to create a budget, but my favorite is called 50-30-20. To overly simplify it, 50% of your overall income should go to needs; 30% to wants, and 20% to savings or debt repayment. While this is a generalization, it helps you determine where to start if you're new to budgeting. Nerd Wallet offers a budget worksheet that takes you through, line by line, to understand how your spending compares to the 50-30-20 rule. Based on your debt profile, you may need to tweak these percentages until you get to a place where your allocations are closer to these guidelines.
I've sat in a room full of people who made finance their life's work, and their conversations are filled with acronyms and terminology. For years, I'd sit there, pretending I understood, while secretly wondering what we were having for dinner. Unfortunately, instead of spending those years learning about what they discussed, I hid behind my fear of looking unintelligent.
As of my high school teachers used to say, "the only dumb question is the one you don't ask", and this couldn't be truer with financial health. Once you get past the discomfort of showing your vulnerabilities, the information you gain from experts will significantly change your relationship with your finances. For me, a better understanding of my financial needs, goals, and behaviors relieved a significant amount of stress.
I've found that three specific question types help improve my understanding the most:
What happens if I...?
What happens if I don't...?
What's my next step toward...?
When I frame my queries in these three questions, the answers typically get me closer to where my financial goalposts reside.
Make the Commitment
The most important tip is simply a mindset shift. Nothing will change until you've decided it's important enough for you to do. All the financial information in the world won't improve your situation if your outlook remains fixed. Anytime you attempt to modify your behaviors, it starts with the commitment you make to yourself to embrace the change.
So I challenge you now to ask yourself what you'll do now. How might you begin to improve your financial health?