8 Indicators of Financial Wellness

8 Indicators of Financial Wellness

Share this:

Financial wellness is a state of being where you are in control of your personal finances. Financial wellness means you can cover expenses and save for future goals. Consider financial wellness as your relationship with money- healthy or unhealthy. Improving your financial wellness is essential to meeting your goals and being financially secure throughout your life. Here are eight indicators of financial wellness:

#1 – Your income and spending are in balance

You are aware of your spending patterns, limit your use of credit, and are mindful of not spending more than your income.

#2 – You follow a monthly budget

Each month you know exactly where your money is going and aren’t living paycheck to paycheck due to overspending. Budgeting can help you save for retirement, pay off debt, and learn to live without wants because you can see where each hard-earned dollar is going.

#3 – You save money to cover unforeseen emergencies

Ideally, you have three to six months of living expenses saved in an easily accessible account that you intend to use only for emergencies. Once you reach six months of emergency savings, continue to save into your emergency fund until you reach another milestone, such as one year of living expenses.

#4 – You save for retirement and other financial goals

You invest in yourself first by automating your monthly 401(k), IRA, or Roth IRA retirement savings contributions. 

#5 – You discuss financial decisions with others

Before making financial decisions or purchasing big-ticket items, you consult with others before spending. Discussion helps determine if the financial decision aligns with your budget and goals.

#6 – You regularly monitor and adjust your financial plan

You have a written financial plan that aligns with your goals, and timeline, and adjust it as necessary. 

#7 – You work with a financial professional

You work with a financial professional who helps you determine strategies appropriate for your investment objectives. A financial professional enables you to develop a budget, create a financial plan, save for your child’s education, and keep you on track to achieve your goals.

#8 – You don’t let your emotions impact your financial decisions

Weighing out the pros and cons of financial decisions before making a final decision is essential to financial wellness. When it comes to investing, emotions can be tricky since investors don’t always make rational decisions, according to the CFA Institute. Financial decisions require evidence and reasoning to make the most thoughtful choice so that you don’t regret your decisions later.

speak to a fiduciary today

Financial wellness is essential for many reasons since it can impact your mental and physical health and overall quality of life. By improving your financial wellness, you can take the steps toward building wealth for a more financially secure future.

Learn more about what makes our retirement planning services unique.

Schedule your appointment today

© 2024 Trajan® Wealth LLC. Nothing in this blog is intended as investment advice, nor is it an offer to buy or sell any security. Please consult your financial advisor for questions about your personal financial situation. All investments involve risk, including the potential for loss. Trajan Wealth clients and employees may have a position in any of the securities mentioned. Portfolio holdings and other data are subject to change at any time and without notice. Additionally, the above links provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. These materials are for informational and educational purposes and are not designed, nor intended, to apply to any person’s individual circumstances. It does not take into account the specific investment objectives, tax and financial condition, or particular needs of any specific person. Please consult with your legal and/or tax advisor before making any tax-related decisions.

More
Articles