Need insights and inspo to improve your financial wellness game? Two experts share their top tips to promote financial well-being—no matter how old you are or what you earn.
Sure, you may fancy yourself to be a wellness warrior if you stick to a well-rounded diet, clock in regular sweat sessions, and get eight-plus hours of shuteye a night. But when was the last time you checked in on the state of your financial well-being—not only in terms of how much you earn and save, but also how you think and feel about money?
“Just like prioritizing care of your body and your mind, incorporating more financial self-care into your daily or weekly routine can be really great for your overall well-being,” says Megan Ford, PhD, LMFT, CFT-ITM, a financial therapist at Stackin.
Keep reading to learn about the basics of financial wellness, followed by actionable tips to achieve it.
What Is Financial Wellness?
Since money is highly personal and multidimensional, Dr. Ford says that nailing down a one-size-fits-all definition of financial wellness can be tough. However, she shares three key components that can lay down the framework of financial well-being:
- Having a solid grasp of your financial landscape (being aware of what you earn, spend, save, and invest)
- Being clear about your financial goals and taking intentional steps to achieve them
- Having a healthy money mindset (releasing shame, unlearning unhealthy patterns of thought around money, being growth-oriented)
Sara Willi, a level 2 trainer at the Financial Gym, has a similar take on what financial wellness entails. “It’s another component of our overall health along with physical, emotional, and mental well-being,” she explains. “Being financially healthy means facing the numbers, thinking through our goals, and making a plan to live our best lives accordingly.”
She emphasizes valuing progress over perfection, as well as striking a balance between enjoying your life in the present while growing your net worth—via saving and investing—to set up a secure and comfortable future. Strong financial health, she continues, “means we can weather the storms that will inevitably come up, leave situations that aren’t right for us, and have alignment with our values and how we spend our money.”
It’s also worth noting that financial wellness will always be a work in progress. “There is no financial wellness nirvana,” says Dr. Ford. “This is an evolving state in our lives through the ever-present ups and downs.”
10 Must-Know Financial Wellness Tips
Financial wellness requires a mix of getting your mind right about money and employing smart strategies to protect and build your wealth. Follow these expert-approved tips to enhance all aspects of your financial well-being—no matter your age or income.
1. Tune into Your Emotions Around Money
According to Dr. Ford, one of the biggest myths around financial wellness is that your emotions don’t matter. “Nearly 90 percent of our financial decision-making is driven by our emotions,” she clarifies, so logic will only get you so far.
She advises being aware of how you feel when making financial decisions. “Are you sad, stressed, exhilarated, or something else? It’s not about changing the feelings. It’s about noticing them and taking a few moments to reflect with curiosity—and recalibrating whenever possible,” Dr. Ford continues. “Gaining more insight into how our feelings influence our financial choices can be empowering.”
2. Prioritize Financial Wellness Sooner Than Later
Another myth that Dr. Ford comes across is the notion that younger adults don’t need to worry about financial wellness just yet—or, similarly, that you can only begin to take action once you reach a certain income bracket. “How long you have to save and invest over time definitely matters,” she explains. “Making moves to save or start investing early can pay off down the line because of the longer timeframe those assets have for growth potential.”
With that in mind, take steps early and consistently—no matter how big or small—to promote financial well-being in the long run.
3. Ask Yourself If You’re Earning Your Worth
Your own state of financial wellness will naturally, in part, depend on how much money you’re making. That said, Willi advises making sure you’re earning as much as you’re actually worth. “Sometimes people aren’t necessarily mismanaging their money,” she explains. They just don’t make as much as they could (or should), but they can take steps to stand up for themselves to demonstrate why they deserve better pay.
She recommends reflecting on your income with the following questions:
- Are you getting paid equitably for what you do?
- Have you done salary research to ensure that’s the case?
- Are you able to ask for a raise?
Willi reminds us that some demographics—including women and members of the BIPOC community—often earn less than white male colleagues. “While it is not fair that you need to do this [extra work], it’s essential for you to do your research and advocate for yourself,” she shares.
4. Gain Clarity on Your Present Financial Situation
Before you can start to make progress on your goals, you need to have a clear picture of what your financial situation looks like right now. Willi shares the following steps so you can see how much you’re earning and spending on a monthly basis, which can inform a new roadmap to improve your financial standing:
- Create a list with two columns. The first should have your net monthly income (how much you earn after taxes and deductions) and the second should include fixed and variable expenses. Willi says the former includes housing, insurance, utilities, and co-pays, while the latter includes things like groceries, transportation, personal care, retail and entertainment. If needed, “Look back at your past checking account or credit card statements to see some trends,” she advises.
- Add your expenses to see your monthly run rate. “Now take your income minus your combined expenses, and see what is leftover for your goals: saving, investing, and paying down debt,” she shares.
5. Keep Your Impulse Buys in Check
Certain behaviors—like making impulsive purchases and spending beyond your means—can stand in the way of achieving financial wellness. If this sounds familiar, Dr. Ford suggests “tricking yourself” to avoid defaulting to patterns that won’t serve you. “Put some distance between you and the purchase in order to delay gratification, which will give your brain time to reset and behave less impulsively,” she advises.
A few of her favorite hacks to put this financial wellness tip into practice include:
- Removing your credit card information on apps and websites where you’re most likely to spend
- Waiting a few days before proceeding with an impulse buy
- Creating a shopping wish list and consulting it before making a purchase
“Most often, people find that these strategies help them to ‘hack’ their wiring,” she explains. “Upon reflection, they didn’t really want most of what ends up in the cart or on the list.” Once you get into the groove of saving funds from reining in your spending, you’re bound to feel empowered by your progress and motivated to stay the course.
“Don’t forget to acknowledge yourself for the little things and minor behaviors that keep you on track each and every day,” Dr. Ford continues. “Small contributions truly add up, but it often takes a perspective shift and some tracking to fully recognize it.”
6. Set Aside an Emergency Fund
Willi says that everyone should prioritize setting up an emergency fund—covering at least three months of your fixed and variable expenses—before addressing other major financial goals. “Keep this in a high-yield savings account and only touch that money in case of a true emergency” she advises. On a similar note, she recommends making sure that you have appropriate insurance (renter’s, health, life, disability, etc.) to protect yourself.
7. Clearly Define Your Financial Goals
Recognizing your values and being super specific about your goals are crucial. “Goals are best accomplished when they’re values-based and detailed,” Dr. Ford explains. Decide what you want to save for and unpack the “why” behind it to best set yourself up for success.
She offers the following example as a template: I want to begin saving $100 a month in a high-yield savings account for a down payment on my future home because his goal will help me meet my values of freedom, responsibility, and security. “Substitute words and phrases for your own goals, but make sure you have detailed out the amount, the type of account, and the associated values,” she shares.
Willi adds that you need to determine what goals are right for you. They shouldn’t be based on what your friends, family, or society deem you “should” have or where you “should” be, but rather what success looks like from your own POV.
8. Streamline Your Savings
Piggybacking off the financial wellness tip above, Dr. Ford invites us to reorient our thinking and strategies around saving. Heed her advice as follows:
- Treat savings goals like a monthly expense, thinking of it as paying your “savings bill”
- Automate your savings so they directly funnel to your goals outlined above
- Save somewhere around 15 to 20 percent of your monthly income, adjusting based on the immediacy of your goals and personal circumstances
“When you’re just starting out, it is really about establishing the habit and getting into the routine of saving over how much, so maybe that [will look like saving] 5 or 10 percent,” Dr. Ford explains. “The most important thing is just to start and be consistent.”
9. Grow Your Wealth Through Investments
Once you break ground on the preceding steps, Willi advises investing in low-cost index funds ASAP. “The first step is to get up to any match offered by your employer, then think through the other ways you want to invest,” she shares. Some options include:
- Increasing your 401k
- Opening up a Roth IRA
- Starting a taxable brokerage account
Again, it’ll pay to get started sooner than later—even if it means investing as little as $25 per month, Willi notes.
10. Don’t Forget to Enjoy Your Life
Although it’s important to be responsible with your money, remember that security and building wealth aren’t the only aspects of financial wellness—especially if they come at the cost of enjoying your life at present. “We’re not just here to make money, pay the bills, and die,” Willi reminds us. That said, she highly suggests making room in your budget for things that bring you joy.
“In addition to building your emergency fund, you should save for goals like travel in separate savings buckets so you can put money aside to do those things without guilt,” she continues. Moreover, she says that you can ignore the advice to cut back on your daily latte order—or whichever small-ish expense of your choosing—if it truly makes you happy.
“There is only so much we can cut from our budget, and being too restrictive is likely not sustainable for the long haul,” Willi says. (Bigger-ticket items—like housing and transportation—are much more influential on the state of your finances, so she advises keeping tabs on those first and foremost.)