Financial fitness and financial wellness describe a state in which you feel in control of your finances. It’s important because many Americans do not feel in control of their finances. According to the 2020 Stress in America™ survey, nearly 2 in 3 adults (64%) say that money is a significant source of stress in their life (American Psychological Association Stress in America: The State of Our Nation Oct. 2020).
Those results aren’t surprising: Work and money-related worries consistently rank at the top of the survey. Financial stress affects health, productivity and relationships, and it can cause depression and anxiety. The only way to combat financial stress is to increase financial well-being.
Four elements of financial well-being include goals for both now and in the future:
- Controlling day-to-day and month-to-month finances and expenses
- Having capacity to absorb a financial shock
- Being on-track to meet financial goals
- Having the financial flexibility to make choices to enjoy life
At any given time, some factors are within your control, and some are not. Your financial behavior is guided by your personality, attitudes, knowledge and skills, and the actions you take can create your level of financial well-being.
Of course, you can do things to increase your financial wellness, like making a budget, saving money and reducing debt. Unfortunately, few people actually act on these things consistently. The personal savings rate is low, most households don’t have a formal budget and most people cannot cover an emergency expense over $1,000.
There is good news – more people are becoming aware of financial fitness. For example, many Millennials (those born from 19822-1996) are saving at a younger age. More than 50% of Millennials feel good about their future1, and 4 in 10 have enough savings to cover three months’ salary2.
There’s no one-size-fits-all solution. But by keeping financial wellness top-of-mind, you can take actions to improve your financial stability, which can lead to less stress. Establish a foundation of sound financial knowledge and actions, and you can start achieving the long-term financial goals that lead to financial wellness.
Your Horace Mann representative can help you with financial questions, as well as providing information on financial fitness.
1Businessinsder.com, “Amid four decades…younger Americans don’t have the emergency savings…” June 29, 2022
2CNBC.com, Advisor Authority survey from Nationwide Retirement, May 2022
The information provided here is for general informational purposes only, and should not be considered an individualized recommendation or personalized investment, tax or legal advice.
WBTL-0761 (5-23)