Financial wellness is as important as your physical or mental wellness. When you can manage your income and expenses pretty effectively, you are known to achieve a state of financial wellness. It can be said that financial wellness is one’s ability to live a proper and healthy financial life. Everyone should maintain financial wellness since it is also one way to keep oneself healthy and fit. Let us scroll down and know more about financial wellness and what role it plays in your overall wellness.
What Is Financial Wellness?
Though money cannot make you happy always, taking care of your finances can significantly reduce your stress and also help you improve your overall wellness. When you have achieved a great state of financial wellness, you can manage your expenses, pay your debts, even be prepared for financial emergencies, and appropriately plan for long-term financial goals, savings and investing money in high yield savings account, certificate of deposits, money market funds, mutual funds, bonds, alternative investments and cryptocurrencies like paybis.
Financial wellness or financial well-being has been defined by the U.S. Consumer Financial Protection Bureau as, “the feeling of achieving financial security or financial freedom in the present, also considering the future.”
Financial wellness is essential since it improves the overall health of a human being. Taking this into account many employers have taken steps forward in offering financial wellness programs for their employees. According to a survey conducted by Bank of America, it has been found that financial programs have become popular since 2011, as a form of employee benefit offerings (1) and it was found that more than eight in ten employers who were surveyed believed that financial wellness programs have resulted in more engaged employees, greater employee productivity, more loyal employees, and more satisfied and happy employees.
What Role Does Financial Wellness Play In Your Overall Wellness?
It is known that 23% of Americans have financial worries and that keeps them up at night.(2) This says that if you do not have properly ordered finances, it can impact your overall health and well-being directly. Finances are among the most common stressors in the U.S. and around 72% of adults say that they worry about money every month and it is not just stress that they experience.(3) This can have a long-term negative impact on the mental and physical health of individuals.(4)
People experience an increased level of fatigue, headaches, muscle aches, and trouble sleeping. Moreover, stress might also cause your body to produce a stress hormone called cortisol that impairs the ability of your brain to create long-term memories.(5)
Below, let us take a closer look at the fact what role financial wellness play in your overall wellness.
Mental Health Benefits of Financial Wellness
Research shows that financial wellness can offer great mental health benefits like they reduce stress and increase productivity and creativity.
Reduced the Level of Stress:
Not having enough money for emergency use, career planning, or other essential things in life could be stressful. This stress of money can drain a lot of peace from our life. It has been found that financial wellness has benefited a lot of employees and those employers who offer financial wellness programs believe that their employees are less stressed.
Increased Creativity and Productivity:
When we are worried about money constantly, there is less chance that we take time for essential creativity, and innovation, and thus leave behind the reasons for better productivity. However, when there is financial wellness, there is huge room for creativity and enhanced productivity.
It is found that employees who are stressed less, perform better.(6)
Physical Health Benefits of Financial Wellness
Financial pressure can result in stress and this can ultimately be the reason for a lot of physical health issues. Moreover, working on financial wellness can minimize stress and might also help you to afford more preventative healthcare measures, such as, regularly visiting your doctor for a routine check-up, being engaged in weight-loss programs, joining gym centers, and preparing more nutritious foods, and so on. So, when you are financially fit, you can reduce stress and take care of your physical health too.
How To Improve Financial Wellness?
Now, let us come to the point that how can we improve our financial wellness. This can be done by following certain measures listed below:
Create A Budget:
One of the most important things that you should keep in mind is that you need to create a budget. It means you should know where you are spending your money every month and create a specific budget that would help you to set realistic financial goals. You should be able to track your income and expenses, which would help you greatly to improve your financial life
Protect Your Assets:
You should protect your assets like your home, automobiles, and other things. This can be done by having done with their insurance so that any sudden or unexpected loss would help reduce your worries or stress.
Create An Emergency Fund:
Another important thing to consider while taking care of your financial wellness is to create an emergency fund. This could be a part of your saving that could be used immediately in case of any emergency.
Eliminate or Reduce Debt:
Make sure that you can eliminate or at least reduce your debt. This is one of the major things to keep away from stress and stay financially well.
Save and Invest:
Financial wellness also means that you should be able to save and invest. This would keep your future safe and help you eradicate stress regarding finances, and thus help you in your overall wellness.
Plan For Retirement or Other Long-Term Goals:
Another important thing to consider while looking for financial wellness is to plan for retirement and other long-term goals. You should be well aware of various types of retirement resources like retirement savings, social security, annuities, and so on.
The Wrap Up
Financial wellness, like physical or mental wellness, is something that you should never ignore. You should invest in your financial wellness just like other aspects of well-being. So, take care of your financial wellness and be confident about yourself.