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Achieving Financial Wellness: Tips for Success

Achieving Financial Wellness: Tips for Success

Jenius Bank Team2/28/2023 • Updated 4/4/2024
Father and daughter sitting on a couch and putting a coin into a piggy bank.

Lessons in financial wellness may be learned at any age.

Open Instagram or TikTok and you’re sure to find plenty of advice about manifesting your financial dreams. At their core, these tips and tricks are all about goal setting.

But then what? Once you’ve envisioned your best financial life, how do you achieve it? Let’s explore some ways to achieve financial wellness.

Key Takeaways

  • Financial wellness means making the most of your money to help achieve your dreams.

  • Using debt strategically and as a tool for large purchases may help you on your financial wellness journey.

  • Planning ahead and preparing for emergencies may contribute to healthy finances and give you peace of mind.

What Is Financial Wellness, Exactly?

The Consumer Financial Protection Bureau defines financial wellness as having financial security and financial freedom of choice, both in the present and in the future.¹ We call that mastering your money so you could live your richest life.

Essentially, financial wellness means you feel confident that you’re able to meet your day-to-day financial obligations — bills, loans, groceries, etc. — as well as bigger, broader goals like paying off student loans or buying a home. You should also be able to afford emergency expenses, like unexpected car repairs, without taking on debt.

Financial Wellness Is Different for Everyone

People with the same income, same financial experiences, and same level of education may take a different approach to their financial wellness definition. It all depends on how they live their life or prioritize their goals.

For example, let’s say you want to reduce credit card debt. One person might define reducing debt as fully paying off their card balances, while another might define it as getting their credit card utilization rate under 30%, a percentage recommended by many credit experts. (Remember, your credit card utilization rate is the amount of credit you’re currently using divided by the total credit you have access to.)

How to Improve Financial Wellness in 6 Steps

While financial wellness isn’t cut and dry, there are some steps you could take to help set yourself up for success. Let’s break them down.

Step 1: Get to the Starting Line

To create a financial wellness plan that works for your goals, it helps to start with a clear picture of your current financial situation. Understand how much and where you spend each month so you’re equipped to make the smartest choices for you. Be honest with yourself by asking a few questions:

  • Are you spending more or less than you earn?

  • Are you paying your bills on time?

  • Could you cover unexpected expenses?

  • What goals are you trying to achieve in the next 6 months? Year? 10 years?

Jenius Bank’s President John Rosenfeld is passionate about financial wellness and helping people understand how they’re spending their money.

“I’ve always professed that the first step to financial wellness is tracking your spending and figuring out where your money is going. I think it’s unrealistic to tell folks to set a budget and determine allocations for how they want to spend their money, when a significant share of people really may not know how much they spend on various things today.”

After figuring out where you’re starting from, you can use this information to create your financial goals. Check for anything that could be missing or needs improvement. Maybe you want to make sure you’re able to take a vacation every year. Or perhaps you want to lower your credit card debt so you could have more free cash each month.

Even though the future’s uncertain, it’s important to think through where you’d like to be in the days, weeks, and years to come. Remember: you miss 100% of the shots you don’t take. So, take the time to create a plan that supports achieving your unique goals.

Step 2: It’s Budget Time

At the end of the day, budgets are simply tools to help you track your money and meet your goals. They give you the space to be more intentional and prioritize the things you enjoy most in your life.

Based on your general idea of where you’d like your finances to be, you could approximate how much to spend and save to achieve your goals. If you have a major trip you’ve been dreaming about, setting aside just a little bit extra each month or monitoring your take-out spending, for example, could help you get there faster.

When creating your budget, take the time to figure out benchmarks for certain categories, like groceries and transportation. While these numbers vary from household to household, considering your average spending may help you create a realistic budget. Review your spending at the end of each month for patterns or major changes.

For example, did you spend more eating out this month? Was that an anomaly or did the kids start soccer so there were a few more nights grabbing dinner out after practice? If it’s the latter, look for a category where you could trim out a few bucks next month to account for this change and keep your spending in line with your budget.

Step 3: Emergency Fund to the Rescue

An emergency fund is money set aside for large, unexpected expenses. These could be anything from an unplanned car repair to loss of income due to employment changes.

A study from The Consumer Financial Protection Bureau found that people without emergency savings are more likely to turn to other expensive methods to make ends meet, like over drafting, rolling over credit card balances, and withdrawing money from retirement accounts.²

Unexpected medical expenses could also be a huge setback. A 2023 Commonwealth Fund Study found that approximately a quarter of people with healthcare debt owe between $2,000 and $5,000.³ Additionally, the Federal Reserve found that 28% of adults went without some form of medical care in 2022 because they couldn’t pay.⁴

Consider opening a dedicated account for your emergency fund and setting a goal amount for the account. Make sure the money is easily accessible so you’re able to use it in case of an emergency but keep the funds separate from your everyday accounts. This physical separation of funds could make it less tempting to use the money for an impulse purchase, like that 72” TV that’s on sale.

To build your fund, you might use automatic recurring transfers and put a specific amount of cash aside each day, week, or pay period. A general rule of thumb is to have three to six months of expenses on hand, but even setting aside a small amount on a regular basis adds up over time.

Step 4: Cover Your Assets

A study from The Commonwealth Fund found that 43% of working-age adults were inadequately insured when it came to healthcare in 2022.⁵ Similar rates of underinsurance have been found when it comes to other types of insurance, such as home⁶ and life.⁷

Insurance is a key component to maintaining long-term financial wellness. Knowing you and your assets are protected may ease your mind, so you’re not constantly worried about shouldering an unexpected burden.

That means insuring your home, automobile, and life at a minimum. Disability insurance may also provide a financial buffer in the case of illness or injury.

As you start looking for insurance, prioritize finding coverage that meets your needs. Then you could start looking at prices. Remember, insurance providers usually offer discounts for things like paying in full, staying accident-free, or bundling multiple policies.

Talk to an independent insurance agent about your options. They explain what’s included in each policy and help determine what’s the best fit for you and your life.

Step 5: Be Smart About Debt

Debt is often a helpful financial tool. Paying cash for your dream house would be a challenge without a mortgage, for example.

But high-interest debt, like with credit cards, could divert money away from saving and building your net worth. Think about the debt that you may have. Is it helping you build your wealth? What are the rates? Look to eliminate debt that isn’t serving your finances in a positive way. And only borrow money when you need it.

If you’re trying to reduce your current debt load, there are three common methods people use: the debt snowball, the debt avalanche, or debt consolidation .

What It Is

How It Works


Debt Snowball Method

Pay off the smallest debt as quickly as possible.

Seeing progress sooner keeps you motivated.

Debt Avalanche Method

Pay off the largest or highest rate debt as fast as possible.

Paying off a big debt is a boost.

Debt Consolidation Method

Combine debts into a single account.

Possible lower rate and one payment monthly.

Step 6: Plan for a Bright Future

Financial wellness isn’t just about the present, it’s also about setting yourself up for success at all stages of your life. The best way to do this is to create a plan for the future. Start investing or planning for retirement early, so you may feel confident knowing you’re on track toward a more secure financial future.

Some of the most common types of investment accounts include:

  • IRA

  • Roth IRA

  • 401(k)

  • Brokerage

Before investing, make sure to research all your options and consult with a financial expert to make a plan that supports your goals and takes your risk tolerance into account.

Final Thoughts

Don’t worry, you don’t have to be a financial expert to achieve financial wellness. Start small. Break it down into pieces that feel manageable.

Once you have a general sense of what you’re working toward, carve out more time to think through your budget. Sitting down to crunch numbers in and of itself isn’t very exciting for most of us, but it starts to get fun when you get to see your savings come to life.

Bottom line: taking action today creates an opportunity to live the life you want tomorrow. That’s Jenius.

Financial WellnessLifestyle