Get up at 6 AM for your workout; prepare a kale salad for your lunch; stop for a therapy appointment on the way home. These are all things on the average person’s “wellness” to-do list.
So when do you take the time to check in on your financial health? We know that physical and mental health are the keys to happiness. But when we overlook our financial health, we’re missing a critical element of holistic well-being.
Financial health is the dynamic relationship between an individual’s financial and economic resources as they influence their state of physical, mental, and social well-being. Financial health requires a certain level of financial literacy and good financial habits.
Unfortunately, many don’t know how to make the best decisions for their money, and often spend more than they can afford. U.S. Census data shows that 56% of adults age 25 and over showed a lack of basic financial literacy.
Imagine the numbers for those older than 65, who are entering the “prime money-management years,” but instead enter the retirement years battling financial troubles. This is because we do not adequately learn about money before entering adulthood.
At BrightUp, we believe everyone deserves to be financially healthy and holistically wealthy. Financial strength is a critical part of a person’s overall health and wellness. That’s why we partner with companies who are putting their employee’s financial health first by providing financial wellness benefits to their workers.
We believe employees are more productive and engaged when they control their finances. By making financial wellness easy and accessible, we empower employees to take control of their finances and build generational wealth.
In this guide, you’ll learn how to approach your financial wellness with compassion for yourself. After all, you’re spending so much time building yourself up in other areas of your life.
You deserve the opportunity to build up your finances too! So if you’re ready to add financial health to your wellness routine, keep reading!
What is Financial Wellness?
So what does it really mean to be financially well?
Financial wellness is a term that has been used in recent years to describe the process of improving your financial health. This process includes having positive financial habits, like saving and budgeting, and avoiding negative ones, like overspending or carrying debt. Financial wellness also includes understanding the basics of personal finance, such as making a budget or learning what investments are.
How does this differ from financial health?
Financial health is more about the current state of your finances. From life insurance to health insurance to retirement savings, having the resources to deal with financial problems, such as a severe illness or injury, or the premature death of a spouse or head of household, is key to living financially healthy.
Financially, health people can conveniently pay their bills, manage their monthly expenses (not living paycheck to paycheck), and save money for emergencies. They can also save for long-term goals and feel confident about their future.
No one can wave a magic wand to print more money. We may not be able to control the systemic problems that perpetuate economic inequality. Still, financial wellness gives you the tools you need to stay healthy despite this.
What Does a Financially Unhealthy Person Look Like?
A financially unhealthy person is not in control of their finances. They live paycheck to paycheck, and they cannot make progress on their personal goals.
Many people find it hard to know if they are financially unhealthy. This is because so many factors contribute to someone’s financial health.
However, a few key indicators can help you identify if you are financially unhealthy and need to make some changes in your life.
Financial warning signs of financial unhealth:
- Increasing debt
- Living paycheck to paycheck
- Low savings balances
- Spending beyond your means
Financial wellness is the degree to which you control your money. In contrast, financial stress is simply a state of anxiety caused by various financial issues. A 2019 Bankrate survey showed that more than half Americans lose sleep over money troubles.
Why is Financial Wellness Important?
Unless we have financial stability, our life feels like one stressful event after another. We constantly worry about whether our kids will have what they need to keep up in school, if we’ll be able to afford the car repairs, or if there will be enough money for our monthly rent or bills.
In other words, a stable financial future can contribute to our emotional well-being and reduce stress levels. Therefore, some signs outside your actual finances could hint that you are financially unwell.
Physical and mental signs of financial unhealth:
- Increased levels of anxiety and depression
- Strained relationships over money problems
- High blood pressure
- Overworking oneself
When you’re stressing about a big money issue, like whether you can afford your rent this month, it can take over every other part of your life. As a result, you may get headaches, stomach aches, and be really tired.
Sound familiar? Financial problems affect our health and well-being in obvious and less expected ways.
If you are experiencing any of these signs, you must take steps to correct the problem before it gets worse. Now, let’s focus on ways to counterbalance all these financial challenges.
Financial Self-Care Practices Can Boost Your Wellness
Money can be a tricky topic to discuss. There are cultural, social, and generational differences in how people think about it.
It is abstract, and even thinking about money can make us nervous or anxious. However, one of the best ways to change your approach to money is by engaging in financial wellness activities, being compassionate, grounded, and practicing self-care.
Practicing financial self-care means focusing your time and energy on your finances, developing specific plans and goals for a better financial future, and finding ways to maintain a healthy financial mindset. Taking care of yourself financially also means developing habits that prepare you to meet your financial goals and teach you how to start saving.
The goal here is not to force yourself to master money management, but to ease your path to financial literacy.
Be gentle with yourself! Taking the necessary steps to protect your financial and present future is a great way to take charge of your life, set goals, and pave the way to achieve them.
Self-Care to Overcome Financial Stress
As we look for ways to better care of ourselves, we also need to explore ways to manage financial stress. While many already focus their time and energy on various forms of self-care, we don’t consider our financial well-being as one of the key elements. We know that the connection between mental health and finances is vital, so take the time to redefine self-care for YOU.
To get to a place of freedom, it helps to look at money through different lenses. To start making more mindful financial decisions, change your mindset about money’s role in your life.
Here are a few tips to get you started:
- Observe and analyze your financial behaviors
- Try to change your perceptions about money
- Taking mindful steps every day to do better
The first step to better financial well-being is to analyze your behavior in relation to money. Before you start actively making changes to your finances, it’s worth exploring your feelings about money. Then, accept that your thoughts are all you have control over in your relationship with money.
This is the key to seeing things differently and improving your relationship with money.
Get Outside Help to Change Your Mindset
Studies have shown that financial therapy is a great way to change your money mindset. For example, a 2019 study found that Solution Focused Financial Therapy, financial counseling, and planning techniques could reduce financial anxiety.
Financial therapists are trained in both finance and psychology to help clients who need assistance. Financial therapy isn’t that different from regular therapy — at least not in its approach.
A financial therapist will first talk with you about your financial history and understand where your ideas about money come from. Then they’ll work with you on a path forward that helps you reframe your thoughts and feelings around money.
Similarly, financial counseling is a broad term that can cover anything from essential budgeting tips to strategies for investing and planning for retirement. Sometimes people refer to these services like financial coaching. BrightUp provides three different resources for individuals who want on-demand financial advice and support:
- BrightUp Buddy
- Financial Coaching by Phone
- Certified Financial Planning Reviews
Brightup Buddy is an in-the-moment text-based Q&A tool where you can get quick responses to common questions like “Should I pay off my mortgage or save?” The BrightUp Buddy will give you a quick response in the moment, so you can make a more informed financial decision.
You can also access skilled financial coaches over the phone for all your everyday money management questions. This is a great way to manage your finances, if you prefer to speak to someone for help and guidance. You can use this service as often as you need, and our coaches are always happy to answer any questions you have.
With access to a Certified Financial Planner, you’ll have peace of mind knowing you’ve planned for the important things in life – whether it’s planning for retirement or buying your first home. Our financial advisors will provide quarterly and annual reviews and recommendations to help you manage your finances.
(If this sounds like the kind of support you need, send your employer to our website for more information!)
If you’ve made mistakes with your finances, a counselor can help you develop strategies to take control of your situation. If you don’t have any immediate financial problems, but still want to improve your relationship with money, a counselor can help you do that, too.
Look Within to Manage Stress
Getting outside help to manage your financial stress is a great start. However, it’s also essential to look within to overcome your anxiety. In this section, we’ll discuss four strategies to leverage mental health self-care to help you feel more prepared to manage your finances:
- Meditate
- Practice self-compassion
- Practice gratitude
- Improve physical health (diet and exercise)
While these may not be the first techniques that come to your mind when thinking about financial wellness, keep reading. It will become clear how they can really benefit your mental state while your manage money.
1. Meditate regularly to work through mental hurdles and bring peace.
Meditating is one of the best ways to calm a busy mind and give yourself peace of mind. Even just a few minutes a day can help reduce stress and increase focus — which is especially helpful if you see a lot of numbers on a screen (or in spreadsheets!) Headspace has excellent resources for mediation and financial stress.
2. Practice self-compassion when you face a financial challenge.
Don’t judge yourself or beat yourself up for your past financial mistakes. Instead, acknowledge your past mistakes, forgive yourself for them, and be grateful that you are now at a place where you can learn from them. Then, move on to making better decisions in the future.
3. Practice gratitude for the financial goals you’re able to meet, no matter how small.
Having enough money to pay your bills is a great reason to feel grateful. Especially if you have trouble making ends meet or have made financial mistakes in the past. Being thankful for what you have can help shift your mindset from focusing on lack and scarcity to abundance and possibility.
4. Work on improving your physical health.
If you’re healthier physically, you’ll have more energy and think more clearly — which will help when it’s time to tackle the challenges of managing your money. Make an effort to eat better and exercise regularly to reduce stress levels.
The better you feel about your finances and mental health, the easier it will be to manage your money. We share other ways to fix your money mindset and other helpful financial wellness tips on our blog!
A Solutions-Based Approach to Financial Health
If you’ve ever tried to budget, save, or invest money on your own, you know what a challenge it can be. The details, the math—it’s overwhelming! It takes time, effort, and dedication. This is why financial wellness programs can be so helpful.
Now that we’ve helped you manage your financial mindset, it’s time to explore ways to improve your actual financial health. You may have landed on this article looking for advice on specific challenges you’re facing financially. Let’s not waste any more time! In this section, we’ll cover the following financial issues many people face:
- Bad credit score
- Too much debt
- Overspending
- Limited access to cash
- Trouble saving
Challenge: You have bad credit.
Solution: Our first piece of advice: don’t be discouraged. According to credit bureau Experian, nearly one-third of U.S. consumers have a “subprime” credit score. That means you’re not alone!
Improving your credit score is a long game. So you’ll need to be patient and compassionate with yourself. Your credit score is compiled based on five elements: payment history, credit utilization, credit history, type of credit, and inquiries.
Based on this knowledge, you can pinpoint small steps to improve in each category. For example, some ways to improve your credit score can include paying your bills on time, listing utilities in your name, catching up on past-due accounts, and paying down revolving credit balances.
You can use financial planning tools to help you track your bills and analyze your spending to find more opportunities to improve your score.
Challenge: You are overwhelmed by debt.
Solution: Remember, according to Debt.org, consumer debt reached $14.56 trillion at the end of 2020. Being overwhelmed by debt is extremely common. It’s also difficult to overcome when you don’t have a lot of financial flexibility.
But it’s not impossible!
Suppose you’re overwhelmed by high interest credit card debt or student loans, or have too many different credit accounts to manage. In that case, a debt consolidation loan could be the best solution. A debt consolidation loan can help you combine your debt into one simple monthly payment at a lower interest rate.
BrightUp provides debt consolidation loans as compassionate capital for employees with lower credit scores and income levels. If your company currently doesn’t partner with BrightUp, many other compassionate lenders are willing to work with you.
Challenge: You tend to overspend.
Solution: Everyone gets a little wallet-happy sometimes. We get it – the serotonin boost is sometimes too much to resist. But if you’re spending consistently beyond your means, you may want to consider creating a budget.
By reviewing your required expenses, you can see how much money you’ll have leftover each paycheck for discretionary spending.
With the BrightUp app, you can create and track a custom budget based on your financial obligations. It will help you plan and stick to a budget to avoid overspending.
Here’s a quick tip: When you want to swipe, take a minute to ask yourself mindfully why you want to make this purchase? Do you need the item? What will this purchase fulfill?
Taking the time to be more mindful about your purchases can help you save your money for something more valuable.
Challenge: You’re stuck in a payday loan cycle.
Solution: Payday loans sound like a convenient way to get access to cash when you’re in a financial emergency. It’s no surprise that 12 million Americans take out payday loans each year.
However, payday loans are incredibly predatory, with interest rates ranging from 391% to 600%! This high interest rate makes it difficult to pay off within the original time frame.
To break out of the payday loan cycle, you may need to consider finding access to capital from a more compassionate lender. A debt consolidation loan or emergency loan from BrightUp can give you access to money when you need it most. Some payday lenders also offer extended payment plans.
Whatever you do, don’t get another payday loan!
Challenge: You haven’t started saving for retirement.
Solution: Keep calm and save on. A 2019 Northwestern Mutual study found that 22% of adults in the U.S. have less than $5,000 saved for retirement, while another 15% have no retirement savings at all.
Find comfort in the fact that you’re not the only one. And that there are ways you can overcome this!
If you’re approaching retirement, don’t panic. You can still expect to receive Social Security payments as one income method. However, if you don’t have a pension plan or any other savings, you may need to explore other lifestyle changes. For example, you may consider downsizing into a smaller home, taking on a reverse mortgage, or continuing working part-time.
If you’re still a ways off from retirement, it’s not too late. You still have time! You’re legally allowed to contribute up to $19,500 a year toward your retirement plan.
After turning 50, you’ll be able to contribute an additional $6,500. This could be a good option if you can make the space in your budget to save aggressively.
Paying down debt to make sure you have fewer expenses upon retirement is another great way to feel more financially secure in retirement.
See If Your Employer Can Help
If your employer cares about their bottom line, they might see the value in helping their employees improve their financial wellness. However, asking your employer if they can bring financial wellness into the workplace can be a little intimidating. Luckily, there are some tips you can use to make the most of this conversation and get your employer interested in providing financial wellness benefits.
Here are some talking points to get you started:
- Financial wellness benefits help support retention efforts
- Financial stress can negatively impact employee productivity
- Introduce a benefits provider like BrightUp
Employees are more productive and satisfied when they are not worrying about finances. Financial wellness benefits can help employees with their day-to-day financial needs. They also provide peace of mind to the employees, which is vital for a healthy work environment.
Financial wellness programs may include free access to financial coaching or counseling, online financial education resources, or loan assistance. In addition, some employers are beginning to offer other types of financial support, such as student loan repayment assistance and emergency savings funds.
BrightUp can offer most of these financial wellness benefits to employees and more. Just as you check your FitBit app to track their eating and workouts, we teach employees how to check their BrightUp app to track their budget and spending habits. Another element of our work is financial education with personalized content, including our blog!
Talk with HR to find out if they’re willing to implement some new benefits, and encourage them to contact BrightUp for more information!
Final Thoughts: Remember Your Worth!
Regardless of their demographics, financial situation, or upbringing, everyone can learn to be financially sustainable.
Money is not a measure of your worth as a person, but it does impact how we can live our lives. A lack of money can lead to stress, less enjoyment, and even make us feel worthless.
The good news is that many of us can gain control over our financial situations. Through improved budgeting and planning, we can improve our finances, which will reduce some of the stress in our lives and allow us to enjoy life more.
Start by exploring the resources we’ve highlighted above, and know that there is a community of people working together to provide as much help and support as possible. Let’s all make an effort to cultivate financial wellness within ourselves—and encourage others to do the same!
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