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Financial Wellness Guide to Better Your Health and Wealth

The ultimate guide to improve your financial wellbeing.

In this financial wellness guide, you’ll learn the key areas to improve your financial health and wellbeing. 

A few years ago, we set out on the road to financial wellness to turn local money conversations into a national conversation on financial wellbeing. We learned that people define financial wellness as having enough to live comfortably, experience little financial stress, and time to enjoy life.

We broke the taboo during the road trips and shared financial struggles, discussed our lagging monthly income, and opened up about our stress levels. I discussed my financial journey, shared my bad credit score and credit card debt. I openly talked about my financial habits and shared my financial plan and the money management skills needed to get my economic life together. 

Today, our mission continues to promote financial wellbeing.

What is Financial Wellness?

Financial wellness is a state of healthy living through the active pursuit of financial knowledge, planning, and goal setting to live your best life.

And living your best life happens when you’re experiencing less financial stress. Stress is a normal part of life, but financial wellness aims to lessen the stress you experience related to money and improve your wellbeing.

Financial wellness definition

While organizations such as the Consumer Financial Protection Bureau (CFPB) define it as “how much your financial situation and money choices provide you with security and freedom of choice.”

There isn’t one definition of financial wellness shared by every single person or organization.

I define financial wellness as a holistic approach to money and living. It’s doing more of what you love and more of what brings joy into your life. It’s the ability to cover financial emergencies, contribute to a retirement fund, manage student debt, and more.

To further define financial wellness, let’s define the words financial and wellness separately.

The word “financial” relates to finances having synonyms: money, banking, and investments. “Wellness” is defined as being in a state of good health as an actively pursued goal.

A New York Times article explained the word wellness emerged in 1650 as the opposite of illness. Wellness was a healthy state of living achieved “without simply avoiding sickness.”

What are the Benefits of Financial Wellness?

Financial wellness is about your health and wealth. It’s about the overall quality of the life you’re living. It takes into account how you manage money and think and feel about your financial situation.

In my book, You Only Live Once, I wrote: “I wanted people to understand that financial success-however you choose to define that success-only matters if you’ve found a balance between money and life. I used the term financial wellness to describe the state of living in which your wellbeing is measured by the quality of your life, not just by wealth.”

We’ve all had moments where our financials caused a great deal of stress. We either didn’t have much of it or stressing over how to make it grow. These worries cause stress that impacts how we feel about our lives. Those feelings and thoughts affect our physical, mental, and emotional wellbeing. And when we cannot meet our financial obligations, it causes stress leading to fatigue, absenteeism, lower production, higher medical cost, lousy performance, anger, and a feeling of hopelessness.

Financial wellness aims for a healthier outlook on life that includes mental, emotional, and physical health. As a lifestyle goal, it’s about managing money today and planning a future with less stress and a healthier lifestyle.

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    Why it Matters

    Financial wellness matters because it recognizes that lack of financial planning and preparation leads to increased stress, mood changes, and lower productivity, impacting our relationships and work performance.

    Many have argued money isn’t essential and it cannot buy happiness. But money does play a significant role in our society. It’s the currency that pays for food, shelter, and medicine. It allows us the necessities to survive and the luxuries we enjoy.

    Money isn’t everything, but it impacts most things. Whether we have too little or too much, it can lead to money worries impacting our health.

    Consider these questions: what feelings and thoughts come to mind about money? Do you feel secure about your future? Do you get anxious waiting for payday?

    When we’re not in control of money, it controls our ability to live well too. Can you afford the much-needed time off? Are you able to enjoy your favorite latte? Do you skip social and family events to stick to a budget?

    I believe people can achieve financial wellbeing through a shift in mindset, improved financial decision-making, access to better banking products, and a supportive community.

    The Financial Wellness Roadmap

    I created a roadmap to guide people who have different starting points in their financial journeys. The road to financial wellness includes five stages–financial literacy, financial capability, financial security, financial independence, and financial freedom. Your journey to financial wellbeing isn’t about making millions of dollars. It’s about taking into account how you’re feeling today as you plan for a better tomorrow.

    The roadmap can guide your progress and includes:

    Stage 1. Financial Literacy 

    The path to financial literacy is understanding the basics of personal finance, banking terms, and how money works. Financial literacy addresses topical money worries and personal finance fundamentals.

    Stage 2. Financial Capability

    The path to financial capability is knowledgeable and capable of making better decisions with your money. Access to better tools can improve your economic life.

    Stage 3. Financial Security

    The path to financial security is when your income is enough to cover your monthly expenses and debt obligations well into the future. Experiencing economic shock is in your plan, and you’re on track to achieve short- and long-term financial goals.

    Stage 4. Financial Independence

    The path to financial independence is when you have enough money to cover your basic needs and some luxuries. Employment becomes optional. 

    Stage 5. Financial Freedom

    Financial freedom is the stage when you can be and live how you want without the trappings of finances. You’re living the life you choose.

    >> Learn more about the financial wellness roadmap here.

    Improving Your Financial Health and Wellbeing

    Your health matters, so, therefore, financial wellness matters. The goal is to achieve financial wellbeing – a state of healthy living – where you experience less money-related stress. Your outlook on life is positive. And your satisfaction is high. You feel well about where you are and where headed.

    It’s about making better financial choices through knowledge and planning. When you can manage your money and feel better about your finances, you’ll gain a sense of security and peace of mind supporting physical, mental, and emotional wellbeing.

    5 Pillars of Financial Wellness

    There are five financial wellness pillars: manage, earn, grow, borrow, and protect your money. These pillars categorize seemingly complex financial matters into five areas that focus on a simple overall strategy. 

    1. Manage Money – Improve your money skills with budgeting techniques to save more and spend better. It’s about ensuring you’re living within you means. This is a cash flow strategy.
    2. Earn Money – Better ways to earn more with your job, skills, and time. It’s about multiplying and diversifying your income streams.This is an income strategy.
    3. Grow Money – Make money with your money through the stock market, real estate, and small businesses. It’s investing money with a focus on returns. This is an investment strategy.
    4. Borrow Money – Become a credit pro and manage it to achieve your goals. It’s about leverage to build wealth, not accumulate debt. This is a credit strategy.
    5. Protect Money – Safeguard your identity, insure your life and assets, and protect your wealth with estate planning. This is a legacy strategy.

    Elements of Financial Wellbeing

    To reach a level of financial wellbeing, you must grow your understanding of money. Learn more about the following:

    Get Started on Your Financial Wellness Journey

    To improve your financial wellbeing, you’ll need to understand better your relationship with money and how it impacts your behaviors and habits. Your money beliefs influence your financial decisions, and that’s where we need to start to create long-lasting change.

    What do you hope to achieve on your journey?

    Your financial journey may be challenging at times, but the work you do will be life-changing.

    1. First, start with this short article on understanding your relationship with money to gain insights about some of your money beliefs.
    2. Second, start crunching your personal finance numbers. These include your net worth, income, debt-to-income, credit score, and cash flow numbers.
    3. Third and finally, learn quick tips to mastering your money with 10 financial wellness skills to achieve success.

    What are financial wellness programs?

    According to the Society for Human Resource Management (SHRM), financial stress results in a 34% increase in absenteeism and tardiness. What is a financial wellness program? The term “financial wellness” was first used in 2006 when the American Psychological Association published its report called The State of Employee Wellness. In this document, they defined financial wellbeing as “the ability to manage income and expenses so as not to be financially stressed.”

    Since then, various industries, including finance, healthcare, insurance, banking, retail, education, government, etc., most importantly, employers themselves have implemented programs.

    These programs aim to help people manage money and improve their finances and reduce financial worries. The idea is that the programs contribute to better overall wellbeing for employees, students, and members. And improved wellness can lead to better productivity, improved grades, and lower losses for financial institutions.

    You’re not limited to what we offer on this website. You have options when it comes to programs to improve your financial health. They include programs provided through the workplace and employers, colleges and universities, credit unions, and community banks. Additionally, we work with these organizations and institutions to make learning about money fun.

    Workplace Financial Wellness Benefit

    Fortunately, more employers are offering workplace financial wellness programs as part of employee benefits. These benefits often include credit counseling and access to a financial professional who can give employees advice. They partner with companies like phroogal, Financial Avenue, Greenpath Financial Wellness, Enrich Financial Wellness, and larger companies like Prudential to offer seminars, workshops, and access to tools. 

    Want to work with phroogal on a financial wellness program at your workplace? Send a message here.

    Financial Wellness Plans in Colleges and Universities

    Many students face money-related stress. A recent student financial wellness survey found that college students stress debt, family obligations, food insecurity, and healthcare needs. 

    Want to have phroogal at your following student financial education outreach? Message us here.

    Credit Union Financial Wellness Programs

    Credit unions are financial cooperatives with a mission to empower members with better banking products. They are also in a position to provide financial knowledge that educates the memberships to make better-informed decisions. Check with your credit union on the programs offered to credit union members. Many CUs we’ve worked with offer monthly seminars and workshops. 

    Are you a credit union wanting to engage your membership? Please send us a message to learn how we can work together.

    Phroogal Financial Wellness Programs

    We’ve worked with dozens of credit unions and colleges/universities across the country to provide curriculum, seminars, workshops and attend financial-related fairs. Our goal is to break the money taboo through storytelling and social settings. We cover:

    • Basics of finance to retirement goals
    • Behavioral finance and our attitude toward money
    • Budget planning, banking services, money management, credit knowledge, and more

    Interested in learning more? Please send a message in our contact form.

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