Financial Wellness

Financial well-being is the security to make daily and monthly financial decisions, the ability to handle financial surprises, and the confidence to plan for the future (Consumer Financial Protection Bureau, 2015). Just as physical and emotional wellness is essential for overall health, financial wellness is vital to achieving financial goals in the present and future.  

 The path to financial wellness begins with knowledge of basic financial literacy skills: knowing one's income and expenses, keeping a budget, understanding taxes, maintaining good credit, and setting financial goals. Once those skills are established, planning for financial success can begin!  Let's explore ways to prioritize and improve financial well-being.

 Financial Clutter

 Clutter can be a real mess! We can feel unsettled when our kids' clothes litter the bedroom floor or library books pile up on the coffee table. We can feel the same stress with financial clutter. Often, we recognize financial clutter when we see it, such as unopened bills on the mail pile. However, clutter can be hard to identify at times and can impact our mental and financial well-being. We can start decluttering by identifying and sorting our visible and hidden financial mess. Once sorted, you can discard financial papers based on a document's life cycle. For example, a paycheck can be shredded after one year, a tax return must be kept for 3 years, and student loan records should be filed for 7 years. Other tips to keep finances organized are creating an electronic filing system, maintaining yearly tax documents, and removing receipts from a wallet often to prevent identity theft.

 Money and Nutrition

 Whether cooking meals at home, eating out at restaurants, or buying ready-to-eat food, food expenses are a big chunk of a monthly budget. "The most common barrier to a healthier diet is that almost half of Americans (46%) view healthy food as being more expensive" (Cleveland Clinic Newsroom, 2023). A plan is important to keep both our finances and bodies healthy. A monthly budget is vital to staying on a clear financial path, and a healthy diet contributes to overall wellness. Your relationship with food is key to guiding nutritional habits. A valuable exercise is to reflect on your social, health, and economic values around food.

 Once you have determined an overall monthly budget, then you can create a food-specific budget, which sorts food into categories (grains, dairy, etc.). A food budget can assist with making healthy and cost-effective food choices by setting a spending limit, especially for non-essential food items. Practical tips on saving money while planning, buying, and prepping meals include "shopping" in your home pantry first to see what you already have, using a grocery list, limiting grocery store trips to once a week, and buying frozen fruits and veggies, a cheaper and nutritious choice.

Money and Relationships

 Relationships take work, and money can cause rifts within even the most solid unions. Over 70% of divorced couples indicate that financial problems were the primary cause of their breakup (Palmer & Palmer, 2013). There are five money personalities: Security Seeker, Spender, Saver, Risk Taker, and Flyer. You can identify which two money personalities drive your attitude about finances by completing an honest self-assessment.

When partners understand each other's primary and secondary money personalities, they explore how they interact with their loved ones and lead to shared money values. Money discussions are vital to healthy finances and healthy relationships, whether you’re just starting a relationship or celebrating 40 years together. To guard against financial infidelity, partners must engage in honest and ongoing conversations that explore money values, discuss budget deal breakers, and find room for financial compromise.  "Financial infidelity is an act of deception by one partner in a relationship where finances are combined. Examples of infidelity include hiding purchases, money or accounts, lying about the amount of income earned, debt owed, and more" (National Endowment for Financial Education, 2021). A good practice is to establish these conversations as financial family meetings, where financial goals are regularly discussed.

 Penn State Extension offers two financial workshops entitled "Your Money Matters" and "Boosting Financial Wellness." These programs are adapted from "Money Counts: A Financial Literacy Series," developed by the Penn State Sokolov-Miller Family Financial and Life Skills Center. These series invite participants to gain financial literacy skills and improve financial wellness. The Sokolov-Miller Family Financial and Life Skills Center also offers a wide range of financial resources.

References

Consumer Financial Protection Bureau (2015, January). Financial well-being: the goal of financial education.

Cleveland Clinic Newsroom (2023, February 1).  Americans cite cost of healthy food as biggest barrier to a heart-healthy diet, according to Cleveland Clinic Survey. 

Palmer, S., & Palmer, B. (2013). The 5 money personalities: Speaking the same love and money language. Thomas Nelson.

National Endowment for Financial Education (2021, November 18).  2 in 5 Americans admit to financial infidelity against their partner.