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What is Financial Wellness?

You may have heard the term “wellness” before and associate it more with your personal health. There’s a newer way to use the word, though, and it actually applies to your financial health. So, what does financial wellness mean? And how do you become financially well? Let’s find out!

Defining Financial Wellness

Many of us might just assume our financial wellness applies to retirement - and we would be partially correct. There’s actually quite a bit more to it than that; in fact, financial wellness makes up three different but equally important aspects.

  1. Financial Health: This blanket term covers your financial resources - what is available to you for spending in the form of cash or credit lines. It also applies to your overall ability to meet your current and long-term financial obligations, such as day-to-day bills as well as retirement.
  2. Financial Well-Being: Simply put, this covers your feelings and confidence levels about your financial situation and how well you think you can manage your money both now and in the future.
  3. Financial Literacy: This term is defined by the amount of knowledge and skills you have in making financial decisions and understanding what it takes to be responsible with your money.
To wrap it up with a neat bow, financial wellness covers both the physical and emotional aspects of your financial life - much like your personal wellness can include both physiological and psychological factors. To be financially well means you have access to liquid assets like cash, can pay your bills and save for retirement, have confidence in your ability to manage your money, and feel you have the knowledge to make sound financial decisions.

Feeling Financially Unwell

If you aren’t feeling all that confident about your financial wellness, you are not alone. According to the Manulife Financial Wellness Index, 40 per cent of Canadians have a “low level of financial wellness” and almost half of those people felt distracted because of it. If you’re one of those who are not sure about your financial wellness, there are many helpful tests and quizzes you can take online to help you figure out just how healthy you are - such as this financial wellness check-up from the American financial firm, Fidelity Investments.

4 Steps Towards Financial Wellness

So, can you improve your financial wellness? Of course! How do you go about getting started? By checking out these tips to better financial wellness.

Step 1
Take a financial wellness quiz to get a better idea of how healthy you actually are. It may come as a surprise to some that they aren’t nearly as good about their money as they could be. Whether that’s spending a bit too much or saving a bit too little, many of us can stand to improve - even if we think we have it all figured out. Use the quiz above or spend a little time researching other resources to figure out your own “financial wellness score.”

Step 2
Learn about different financial terms and the skills you need in order to be successful at each aspect of financial wellness. That means learning how to make better spending decisions, how to properly save for special occasions or expensive purchases, or how to make a budget and signs that you are overspending. It also means understanding your income and exactly where your paycheque goes.

Step 3
The next step can be a difficult one for many of us, but it simply comes down to asking for help. Whether that’s from us at 310-LOAN with a payday loan to get you through to the next paycheque, or it’s with a financial coach who can break it all down - look to the experts for support. If you don’t feel comfortable reaching out, try to remember that most Canadians have only $100 in disposable income, with $167 of debt obligations each month. Debt is not a new issue for us, nor are concerns about retirement savings or paying the credit card. Basically, we’re all struggling.

Step 4
The previous steps prepare you for becoming financially well. This next and last step ensures it. Simply put, set goals and stick to them. For instance, during your financial wellness quiz, did you find out that you spend too much on eating out? An important goal for you would then be to set a budget (goal) for your weekly restaurant bill and follow through with it week by week. The same process can be said for savings, both for an emergency fund and long-term retirement plans.

Financial wellness is not an unattainable goal - just as losing weight or lowering your blood pressure aren’t, either. And just as you would for your personal wellness goals, be realistic and start small for your financial wellness goals. You wouldn’t expect to lose a lot of weight in a day; you also won’t turn your financial life around in a day. While you’re working towards improving your financial wellness, you can turn to 310-LOAN to help you through with a cash advance deposited straight to your bank account in as little as 30 minutes upon approval. We’re here to help you reach your goals!

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