Frontwave Blog

Are You on the Right Track to Financial Wellness?

April is National Financial Capability Month, an initiative designed to raise awareness about the importance of financial literacy and how to improve your financial future by becoming financially prepared. That makes it the perfect time to do a financial check-in and make sure you’re doing all you can to ensure financial wellness. As we’ve all recently experienced, focusing on saving and securing our individual financial future is key to being prepared for life’s expected and unexpected challenges.

Understanding Financial Wellness

Let’s start by looking at what we mean by “financial wellness.” Contrary to what some people may believe, it doesn’t mean having no debt or having tens of thousands of dollars in savings. Instead, it means being able to fully meet your current and ongoing financial obligations, feeling secure in your financial future, and being able to make choices that allow you to enjoy life.

You can get an idea of your own financial wellness by considering the level to which you feel you:

  • Have control over day-to-day and month-to-month finances (housing costs, loan payments, utility bills, etc.)
  • Have the capacity to absorb a financial shock (such as an unexpected car repair or job loss)
  • Are on track to meet your financial goals (for example, buying a house or saving for college)
  • Have the financial freedom to make the choices that allow you to enjoy life (for example, being able to eat out or go on vacation from time to time).

Improving Financial Wellness

The more you feel you are able to do each of the above, the stronger your financial wellness. But don’t despair if you’re not 100% there yet! Many people have room to improve. Fortunately, there are lots of ways to get there — and to ensure continued success over time. Here are 8 tips to get you started:

  • Create a budget. A budget will help you better understand where your money is coming from and where it’s going so you can make more informed choices.
  • Aim to spend less than you earn. By reducing your expenses, you can help reduce or avoid debt and bolster your savings. When looking for areas to cut back, carefully consider needs vs. wants, and shop around to see if you’re getting the best deal on those needs.
  • Build emergency savings fund. Start by putting aside what you can afford in order to help cover many common emergencies, such as car repairs or medical bills, which could otherwise become costly debt. Prioritize a dedicated savings account for these unexpected expenses as one of your top savings goals. Over time, experts recommend aiming to build up 3 to 6 months’ worth of living expenses.
  • Make saving easy by making it automatic. There are a number of ways to automate your savings. Reoccurring transfers are considered one of the most effective ways to build your savings, and we’d be happy to help you set that up! Simply give us a call at 800.736.4500 or swing by a local branch.
  • Only borrow what you can afford. Don’t deny yourself, but avoid spending simply to “keep up with the Joneses” or as a status symbol. Choosing to spend now can put your long-range goals in jeopardy.
  • Grow your money. For example, contribute as much as you can to employer-sponsored retirement plans, especially if your employer makes matching contributions. Consider looking into other ways to grow your other savings and investments, such as with certificates of deposit or money market accounts.
  • Protect what you have. Make sure you have adequate insurance for yourself and your assets.
  • When planning for the future, set SMART financial goals. Break down your financial goals so that they’re Specific, Measurable, Achievable, Relevant, and Time-bound. While dreams tend to be aspirational and often vague, setting actionable SMART goals can help you actually reach your dreams. (And remember, we'll be right there to help you do it!)

Want to learn more about banking, lending, saving and planning?

Check out our upcoming financial seminars. They’re free and virtual, so you can soak up some financial knowledge right from the comfort of your couch!