The following blog post is part of?The Road to Financial Wellness Blog Tour. Over a period of 30 days, the Phroogal team will go to 30 locations to raise awareness about financial empowerment. Today (June 5, 2015) they will be in Philadelphia! Our goal is to help people learn about money by starting the conversation. We understand that local conversations can help bring about national awareness.
In our society, talking about money is still taboo in many ways. However, a wider conversation about money can help us all learn more about how to obtain financial wellness. As you consider your own finances, it's a good idea to ask yourself what financial wellness means to you — and what you are doing to reach it.
What is Financial Wellness?
In basic terms, financial wellness is a healthy relationship to money. It's not about following someone else's idea of what you should be doing with your money. Your own financial wellness is about your relationship to money. Understanding how money works, as well as recognizing the emotions that come with your money habits, can provide you with a basis for changing the way you interact with money.
Your level of financial wellness indicates your comfort with your own financial situation, as well as your plans for creating the life you want. Taking the to understand where you stand, and then figuring out how you can improve your situation, can help you take charge of your money.
Learn About Your Relationship with Money
It's always a good idea to know yourself — and this includes understanding the way you view money?and understanding your money personality. I view money as a means to an end. I could probably earn more money than I do, but why should I? I make enough to live comfortably, help others, give my son good experiences, prepare for the future and travel. I don't see money as a way of keeping score; I see it as a tool for my life.
You might view money differently. Be honest with yourself about how you view money. Think about your reasons for wanting more money, and what you would do with it. Also pay attention to the way you use money and the kinds of things you spend it on. One way to get an idea of your relationship with money is to take the money personality quiz from Payoff. This quiz encourages you to share your dream, and then answer a few questions about your personality to help identify your potential relationship with money. Then you can see your money personality affects your?dream. My money personality is that of the “Guardian.” Basically it means I'm boring and I like to take solid steps, planning my future. I took the test again as someone not?quite opposite to me, but a little more on the “careless” side. The “Free Spirit” is different to me, in that it's more likely that this type will be forgetful about bills and take more investment risk.
While you don't want to get hung up on the results of any personality quiz, taking a quiz like this can help you at least take a step back and honestly evaluate your relationship with money. It might even open your eyes to some of the pitfalls that have been holding you back. Once you see where you can improve, you'll be better able to take the next step on the road to financial wellness.
Build Your Own Version of Financial Wellness
Financial wellness doesn't happen overnight. There is no magic solution for your finances. Creating your own version of financial wellness requires that you acknowledge what you want your life to look like, and what you need to change about your finances to get there. In some cases, it might even mean having candid money talks with those around you. While you don't need to go into details about your financial situation, there is nothing wrong with talking about what money means to you.
In fact, being able to talk about what money means to you, and how you use it, can lead to better understanding between you and your life partner, as well as better understanding with friends and family. When you are able to have these conversations, and articulate what financial wellness means to you, it's easier to get on the right path.
As you build your own version of financial wellness, here are the steps to follow:
- Figure out what matters most to you: Identify your values and priorities. Figure out how you want to use your money to benefit yourself and others.
- Stop spending on things that don't matter to you: Now that you know what matters to you, stop spending on the things that don't. I love spending money. But I don't like spending it on just anything. I'm particular about my spending. I'm willing to spend a lot — if it's something I care about.
- Create a plan to direct your resources toward your goals: The road to financial wellness requires a map. Create a plan to use your money for your purposes. Want to pay off debt? Create a debt pay down plan. Are you hoping to retire one day? Figure out how much you need for retirement?and then set aside money each month to help you reach your goal.
- Stick with your plan, tweaking as needed: My spending plan is very basic. My priorities are paying the bills (survival), saving for retirement, giving to charity and building my emergency cash cushion. Once those things are covered (and they are through automation) I can use the rest of my money for what I want. I can set up short-term savings to prepare for a vacation or I can go to a nice restaurant or to the spa or take my son on a day trip to New York City. I can also tweak my plan as needed, as priorities and my situation changes.
When you put together a plan, there is nothing you can't accomplish. Figure out what financial wellness means to you, and then go from there.
What does financial wellness mean to you? What steps are you taking to achieve your goals?