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Financial Wellness in 2021

Financial Wellness in 2021

| January 21, 2021

           We all know the cliché saying, “new year, new me”. Every time a new year rolls around everyone begins to reexamine their goals for the upcoming year and what they hope to accomplish. Some people want to lose weight, some hope to get a new job and others want to find more balance in their lives. However, there is one area that is often overlooked, which is our financial wellness. Sure, we set goals like, “I want to make more money” or, “I want to save more money”, however, we tend to leave our goals broad and vague rather than examining and executing the steps to achieving financial wellness.

            To start, let us examine what financial wellness even is. Having financial wellness is to have an overall healthy financial situation where your money is working its best for you. There are multiple components that go into this such as establishing and abiding by a budget, managing and minimizing debt, being wisely invested and a constantly reevaluating of your current financial situation and needs. Essentially, financial wellness is all about creating healthy habits when it comes to your money.          


            Budgeting is a key component of financial wellness because it is important to understand how your money is being spent, saved, etc. By creating a budget, you will gain an understanding of how much money you have coming in and how much money you have going out on a regular basis. A budget will also help you understand where you may be wasting money and how you could potentially be saving more. A common example is when people look at how much money they spend eating out versus how much they could be saving if they cooked more meals and packed their lunches. Having a budget that you stick to will help you create healthy habits when it comes to how your money is spent and saved which can only help you in the long run.

Managing & Minimizing Debt

            The majority of people have some form of debt in their lives. Whether it be student loans, credit card bills, or even a loan for a house or car, debt is a normal part of life for the majority of us. The important thing with debt is to keep it within a manageable range and to make regular payments towards lowering and eventually eliminating your debt. Did you know that lowering your interest rate could lower your payment and have a debt paid off faster while paying less in overall interest?  Speaking to your financial advisor about your debt is key because they can help you construct a reasonable plan of action for tackling debt that will fit within your budgetary guidelines.

Making Wise Investments

            Idle money is money that is not working at its best for you. You may be sitting on a huge sum of money in your checking account, saving up for a “rainy day”. However, did you know that that money could be growing at a higher rate for you if invested it?  Maybe you should be regularly putting money into a 401(k) plan or a Roth IRA. Instead of just putting money into a separate account for your kid’s college fund, perhaps you should be investing into a 529 college savings account. There are lots of different ways that your money could be working better for you. Speak to your financial advisor to find out what you could be doing to better utilize your funds.

Constant Reevaluation of Your Financial Situation and Needs

            There are a lot of platforms out there nowadays where you can invest on your own which is great. However, what they are missing is being able to give you a complete financial review, assessing your life changes such as having a new child, saving to buy a home or an increase/decrease in pay, and helping you to reevaluate your current financial situation and needs and adjusting accordingly. Keeping your financial advisor in the loop when it comes to major, and even minor, life changes means that they can continuously update your financial plan so that it works best for you. Things are constantly changing and your financial plan should too. Do not underestimate the importance of having someone proactively looking out for your specific needs.

            Just like eating healthy and going to the gym, your financial wellness is dependent upon creating and maintaining healthy habits. Consult with your financial advisor on a regular basis to begin taking the steps towards greater financial wellness in the new year. 



**This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. Prior to investing in a 529 Plan, investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.