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It's Time To Define Your Financial Wellness Goals Thumbnail

It's Time To Define Your Financial Wellness Goals

Terry Herr, CFP®, CLU

January Is National Financial Wellness Month

January is Financial Wellness Month, a time to to plan and update your financial strategy.  Its time to review your financial wellness goals.

It’s a great time to connect with Herr Capital Management to discuss your financial situation and aspirations for your future. It’s also a good time to connect to see if your financial strategy needs any adjustments or changes based on your lifestyle. Here are a couple of thoughts on defining what financial wellness means to you.

Defining Financial Wellness

The first thing to do is define what “financial wellness” means for you. This might drastically vary from person to person. It is informed by who you are, where you are coming from and what your experiences with money are. A person who has had serious financial troubles in their life might have different expectations from a person who has enjoyed relative financial stability.1,2

How, then, to define this? First, ask yourself what you need to feel secure, financially speaking. Here are the questions to consider:

  • What's important about money to you?
  • How much should you have saved? 
  • How much income should you be bringing in each month? 
  • Where are you at with your debt? 
  • Would things be simpler if you carried less debt? 
  • How fluid is your cash flow when it comes to expenses that are not urgent (taking your family out to dinner or on a small trip) versus larger financial goals (such as buying a new kitchen appliance)? 
  • Finally, and perhaps most importantly, will you be able to retire at your target age?

Financial Wellness Goals

Thinking about financial wellness is often a matter of setting goals for what you can accomplish now and what you can work on to make it a part of your larger financial strategy. For now, consider taking these actions:3

  • Have a values-based conversation with the decision-makers in your household, meaning any tax-paying adult who contributes income and shares responsibility for the bills. This could be your spouse or a family member. Make sure that the non-essential things you are spending money on lining up with your commitments to meet your financial needs. This is not a “stop getting lattes” conversation; it is a “are we spending money on the things that matter?” conversation.
  • Consider automating payments, especially towards regular items, including student loans, credit cards and other installment payments.
  • Creating an emergency/opportunity fund reflecting 3–6 months of household expenses will afford you a stable foundation going forward. If that seems too ambitious, build the fund a month at a time until you reach your goal. The emergency fund portion can be used to take advantage of situations in your personal financial life or investment opportunities.
  • Make regular contributions to your retirement accounts. Take advantage of any matching contributions (FREE EXTRA MONEY!) you might get from your employer. 
  • Make long-term financial goals. If you are thinking in terms of buying a house, for instance, let that guide your overall financial strategy. 
  • Is becoming totally debt-free an achievable goal? It can be, if you make it a priority. That said, being totally debt-free can be a difficult task.  For that reason, doing some math and creating a debt reduction plan is not only advisable, it is necesary.

I've never been a big fan of "Rule of thumbs" because as mentioned above, every individual has their own specific definition of financial wellness. Some of these examples might feel like a long reach. Others, you might already be practicing. The good news is that with careful practice,  judicious scrutiny and perhaps professional help, many people can gain a feeling of satisfaction and even pleasure from maintaining financial wellness.

We're always available to answer questions to help you achieve financial wellness.  CONTACT US to schedule a time to discuss "What's Important About Money To You?".

  1. https://www.forbes.com/sites/riankadorsainvil/2020/04/21/steps-to-financial-wellness-during-financial-literacy-month/?sh=32a176133346
  2. https://www.cnbc.com/2021/01/21/12-month-roadmap-to-financial-wellness.html
  3. https://www.moneymanagement.org/credit-counseling/resources/financial-literacy-month

This content is developed from sources believed to be providing accurate information. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered personal financial advice or as a solicitation for the purchase or sale of any security.