Financial Wellness Month

What is a Financial Wellness Program?

According to Lee Eliav, digital marketing manager of HelloWallet, “Financial Wellness” may mean one thing to employees and another to their employers. Employers see financial wellness programs as practices that guide employee behavior and create positive productivity. Employees, on the other hand, see Financial Wellness Programs as those which assist them personally to save money and guide retirement saving.

In his article, What is Financial Wellness? 5 Elements of Financial Wellbeing, Eliav lists the five elements of financial wellness: 1. Spending; 2. Emergencies; 3. Guidance; 4. Benefits; and 5. Investments. In other words, to be financially well, a person needs to 1. Know what he/she spends money on and how that needs to be modified to reach certain goals; 2. a nest-egg of 3-4 months of income to be set aside for emergencies; 3. Sound and trustworthy financial guidance from someone knowledgeable and who has only your best interests in mind (not necessarily your stock broker if he/she is making fees from your trades or from managing your accounts); 4. A thorough knowledge of the benefits that are available to you and how to make proper use of them; and 5. A sound investment plan that takes into account your work and retirement goals.

Of all of these elements, Eliav elevates “Guidance” to the position of most important.

After all, if you have a knowledgeable and objective financial guide, and if you follow their advice, you are on-course for avoiding poor financial decisions. No one, of course, can see into the future and know how investments will fare, but a good financial guide will help you diversify your assets so that during a period of loss in one sector, you will be covered by gains in another.

All financial advisors that you speak with will ask you some very common questions. One of the first things they will ask is whether you have your Estate Plan in order – that is, do you have a Will, a Trust, A Power of Attorney, have you designated someone to make health care decisions for you. Why are these important? Because if you don’t have your emergency documents in order, an emergency could mean that your assets, instead of taking care of you and your loved ones, are being spent in Court to appoint a guardian for you or your loved ones, or probating your estate, instead of transferring your estate immediately, as a trust could do.

The best advice I have for people is to decide that you will take an open-minded and fearless look at your financial reality and plan for the future. It is tempting to hide your head in the sand and deny that anything could happen to you, but we all know, intellectually, that is nonsense! The Artist formerly known as Prince died in his fifties a very wealthy man. Because he had no Will or estate plan, there are numerous people coming out of the woodwork claiming to be his illegitimate children. If he had a Will, these people would have no claim on his money. Without one, it is going to be a free-for-all. Don’t let that happen to you and your loved ones. It is better to look at life clear-eyed and realistically than to base our inaction on folly. The New Year is a good time to start that clear-eyed investigation.

Good luck!

If you want more information on the subject of financial wellness, check out these sites and articles!