Financial Wellness is an intentional practice!

Financial Wellness means achieving a balance in life where one can live within their means and appropriately and actively plan for the future. Financial Wellness can be a difficult discipline and can be tough to get under your belt, but small steps can pay off big time in the long run. It’s all relative and significant.  What is important to you financially? What is your attitude toward your financial well-being?  

My pragmatic life experience plus my educational merits (MBA) and my Holistic Health expertise (Ph.D.) allow me to address this key issue and help others build a good outlook on both their financial as well as their emotional picture. After all, financial troubles are one of the top stressors that Americans report and one of the triggers to a ruminating mind preventing restorative sleep. Taking small steps to control spending and saving money can lighten the burden of everyday life. Keep in mind that finances are relative. Taking an inventory of what truly matters in life and how to support that lifestyle is what matters. What does it mean to be successful in today’s world? What is your personal definition?

“A 2019 Bankrate survey showed that more than half of Americans lose sleep over money troubles. According to the Bankrate survey, money worries are the biggest cause of sleep loss, and it’s getting worse. Seventy-eight percent of U.S. adults are losing sleep worrying about everyday expenses, saving for retirement and healthcare costs. Add in those unexpected expenses and wanting to save for a vacation or new house, and the amount of stress felt can reach a dangerous level.”

The first step is to get your mind aligned to achieve financial wellness. This can be as simple as making paying off debt a priority. Do not buy what realistically you cannot afford and create a budget. A budget can be a daunting task yet make it a priority, and remember, life’s needs change and so must budgets. Let’s get on.

Financial Wellness in a nutshell: Financial Wellness is a state of financial well-being in which a person manages their bills and expenses, pays their debts, and weathers unexpected financial emergencies and plans for long-term financial goals such as saving for a house or saving for retirement. Financial Wellness means less anxiety, less stress, and better sleep. Financial Wellness gives a person a sense of security, of having the peace of mind that they can meet their financial obligations to others and self on a monthly basis. Unfettered money issues can have a devastating effect on a person’s self-esteem and mental and physical health.

Principles of Financial Wellness

Achieving financial equilibrium may not be something that happens overnight, but understanding the basics to financial well-being can kick-start a journey from which one can benefit for a lifetime.

One popular way to work with your money is using the 50/30/20 rule. It is basic, it is clean, and it is doable. When looking at your money goals 50% of your income should go to Needs or necessary costs, 30% to Wants, you know that savvy-looking suit or dining out, and the last 20% should go to Savings (this includes Emergency Funds). Savings, yes savings, most Americans are pitiful at this task. An important factor here is being clear with what Needs and Wants are in your life, do not get them confused!

The U.S. Consumer Financial Protection Bureau defines financial wellness — also known as financial well-being — as “the feeling of having financial security and financial freedom of choice, in the present and when considering the future.”

For reference, the 50/30/20 rule originates from the “All Your Worth: The Ultimate Lifetime Money Plan,” authored by Elizabeth Warren and daughter Amelia.

Budgeting – Having a good financial relationship with money and a positive mindset

Creating and sticking to a budget lays a foundation to build financial well-being. It provides a roadmap to manage day-to-day finances, prepare for financial emergencies and plan for the future. Setting a budget is about understanding the emotional connection that we all have with money and our finances and managing those emotional connections, being accountable for that “last-minute I do not know why I made that purchase” type of behavior. A budget helps tame the usual challenging emotions about money; shame, guilt, and fear and brings ease, joy and freedom around the subject of the use of money. At times too much joy makes us purchase unconsciously!

• Side note:  The first step in devising how you will tackle this “Budget” task:  Write it all down first, no tech. Research shows that writing stimulates neuronal activity.¹ Writing on paper (a somatosensory experience) signals the brain to encode, and affect cognitive change. It also creates an emotional attachment to what is being written or thought out, it seems that writing on paper gives a person more complex spatial information, so all of those numbers and budget ideas when all written down and visualized, just make more sense. Writing down budget goals and seeing the numbers on paper helps a person be more likely to remember and act accordingly concerning money-to-budget issues.

Debt – Regaining control of your day-to-day finances

Managing debt is key to your financial serenity. Knowing how to carefully manage credit can build your credit score. A good credit score is key for making large purchases such as mortgages, auto loans, and other large purchases, and yes even for renting an apartment or when applying for a job.

Set an intention: Building good credit, and making good choices when it comes to paying off any debt is crucial when considering your spending habits. Setting intentions for your money in the same manner that you would set intentions for daily activities needs to come second nature when managing debt as in setting these intentions usually helps to curtail impulse buys.

Savings – Having clear plans to achieve your needs and wants.

Long-term savings and investments can provide financial security and peace of mind for those golden years. Short-term savings can leave you with cash on hand to cover home repairs, vacations, or other planned expenses without having to increase your debt.

Emergency funds – Having the ability to withstand financial shock.

Insurance or emergency funds can protect you financially from unexpected emergencies. Insurance can cover losses due to fires, floods, or health emergencies. An emergency fund, on the other hand, covers other crises. Both can help prevent you from using long-term savings or going into debt.

In reference to Savings and Emergency Funds, try to allocate 20% of your net income to savings and retirement investments and this includes adding money to an emergency fund. One can open a bank savings account, make IRA contributions to a mutual fund account, and invest in the stock market (yet this is tricky and time-consuming). You should have at least three months of emergency savings on hand in case you lose your job or an unforeseen event occurs. After that, focus on retirement and meeting other financial goals down the road.

At its core, the practice of establishing good financial habits improves the quality of life². Financial Wellness then is the state of (money-related) well-being (financial self-care) that’s achieved and maintained when you know what you have, you know where you’re headed, and you feel good about it. That being said, anyone can get there, no matter where you are in your financial journey or how much money you have or don’t have.

Financial Wellness is an intentional practice, a way of life – not an end state to be achieved or a destination to be reached. It is impermanent, and ever-changing throughout one’s lifetime. A cycle that is never-ending.

• Financial wellness is a state of being in which you can fully meet your current and future financial obligations while feeling secure in your financial future and making choices that allow you to enjoy life — U.S. Consumer Financial Protection Bureau.
• Financial literacy is the knowledge and training needed to manage your personal finances — such as learning how to create and manage a household budget, investing money for retirement, or participating in one-on-one coaching and counseling to determine how to buy a house or start a business. — National Council of State Legislatures.

Note that it is highly likely that the other pillars/disciplines of Holistic Health will be thrown off balance due to a lack of attention to finances, and that high levels of financial stress manifest through physical symptoms like sleep loss, anxiety, headaches/migraines, compromised immune systems, digestive issues, high blood pressure, muscle tension, heart arrhythmia, depression and a feeling of being overwhelmed. Make your financial wellness intentional. Make it habitual!²

For further information on how you or a loved one could benefit from a Holistic Wellness, Whole Health path, please do not hesitate to contact me at sixto@drsixto.me

To your Whole Health, naturally!

Sixto J. Sicilia, PhD

¹ Melore, Chris. “Writing on Paper Triggers More Brain Activity than Using a Tablet or Smartphone.” Study Finds, 19 Mar. 2021, https://studyfinds.org/writing-on-paper-brain-activity/

²  Gardner, B., Lally, P., & Wardle, J. (2012). Making health habitual: the psychology of ‘habit-formation’ and general practice. The British journal of general practice : the journal of the Royal College of General Practitioners, 62(605), 664–666. https://doi.org/10.3399/bjgp12X659466