Key Takeaways

  • Being financially healthy means more than just not having debt. It’s about being satisfied and confident in your financial situation
  • The key to achieving financial health is creating a financial plan that ensures every dollar you earn is doing something for you
  • Just like a personal trainer or doctor can help you achieve and maintain physical health, working with a CFP® professional can help you improve your financial health
  • Working towards financial wellness can even help you feel in control of your life

If you weren’t sick, would you say that you were in good health? Of course not, because you know that being in good health is much more than not being sick.

Physical health and wellness includes not only the absence of disease, but also strength, stamina, endurance, and good vital signs.

Financial health works the same way. Just because you’re not up to your eyeballs in debt doesn’t mean you’re financially healthy.

You count on medical professionals both when you’re under the weather and to help you maintain good health. An expert financial planner can do the same for your financial health.

In fact, the process is very similar with both medical and financial professionals: Have regular check-ups, do the work you need to do between appointments, and contact a professional whenever you have questions, concerns, or a situation that needs immediate attention.

Financial Health, Defined

If you’re financially healthy, you’re satisfied with your financial situation. You may not be rich, but you don’t lay awake at night worrying about money. You feel pretty good about where you are now financially, and how you’re saving for the future. You might not have as nice a car or house as your neighbors, but you’re comfortable.

If you’re financially healthy, you know you’re being smart about your money. You may indulge yourself from time to time, but in general you spend wisely. You have an emergency fund. You’re putting away money for your short-term goals, such as a vacation or new car. You’re investing for your child’s college and your own retirement. You’re paying down debt (or maybe you don’t even have any).

And not only are you saving and investing to reach your financial goals, but you’re not just tossing a few bucks into a 401(k) from time to time. You have a plan.

How To Think About Financial Wellness

One helpful way to judge your financial wellness is to realize that your finances, and every dollar you acquire, should be working for you.

You’re the boss of your money, and every dollar is an employee. Does each one have a job that’s important to you? Is each one doing its job well?

Every time you pull out your wallet and spend some of your dollars, is the purchase worth the amount of time you had to work to earn it? Will you feel as good about that purchase five years from now as you will five minutes from now?

Creating A Plan With A Professional

Although there are many professional designations for financial planners, the gold standard is CERTIFIED FINANCIAL PLANNER™, also known as a CFP® professional. To become a CFP® professional, someone must have an extensive financial education and show that they've mastered:

  • Financial planning
  • Education planning
  • Risk management and insurance planning
  • Investment planning
  • Taxes and tax planning
  • Retirement savings and income planning
  • Estate planning

So how can a CFP® professional help you boost your financial wellness? By guiding you on every aspect of your financial life.

Let’s say you have multiple financial priorities: student loans, buying a house, credit card debt, your child’s future college tuition, and saving for retirement.

How can you balance all of those priorities? Where should you even begin?

A CFP® professional will not only help you craft a plan to do all that, but break it down into simple steps and work with you as you tackle each one. They’ll keep you on track, celebrate every little win with you, and help you adjust your plan as your circumstances and priorities change.

What you need isn’t someone who hands you a big, comprehensive plan and says, “Do all this.” You need someone who will turn each large goal into a series of small, manageable, actions. And that’s what financial planning is all about.

The Benefits Of Financial Health

Your financial wellness may be only part of who you are, but it can have a profound effect on your physical and mental well-being.

Multiple studies show that people who feel financially healthy have less stress, are more productive, display less absenteeism at work, and enjoy life more. Studies also show that finances are one of the leading causes of stress and that stress can contribute to a number of physical issues.

Most importantly, people who achieve financial wellness are more likely to feel confident that they’re in control of their lives.

Measuring Your Financial Wellness

Unlike, say your credit (FICO) score, which is a single number, your financial wellness isn’t a single data point. Instead, your financial wellness is measured by your answers to these questions:

  • Do I understand what my attitudes about money and finances are and where those attitudes come from?
  • Do my attitudes about money and finances work for me, or do I want to change them?
  • Do I feel in control of my finances, or do I feel that my financial situation is determining my happiness?
  • Do I have the financial freedom to enjoy life today while planning for tomorrow?
  • Am I on track to meet my short-term and long-term financial goals?

These questions are only a starting point. If you're interested in learning more about financial health, check out our Lunch & Learn.

Reach out to a CFP® Professional at Facet Wealth for more advice.