Understanding Financial Wellness: A Path to Better Financial Health
Financial wellness is a growing trend in America, and there’s good reason for wanting to have better financial health. According to Annuity.org, in 2021, 34% of U.S. adults reported that “just getting by financially” describes them completely or very well.
The U.S.’s Financial Health
Our current debt values are concerning. The Kobeissi Letter points out how household debt is at an all-time high, sitting at $17.1 trillion. This includes more than double the mortgage debt we saw in 2008.
The New York Fed Consumer Credit panel shows how Credit card delinquencies are starting to go on a rise:
The Gap in Financial Literacy
We have more tools available to learn about and improve our financial situations than ever before. Budgeting apps like Rocket Money and Mint track our spending. Local municipalities offer free one-on-one financial coaching. Schools are teaching financial literacy to high school students. There are countless resources offering steps to achieve financial health.
Despite these resources, why do we still lack financial literacy and wellness? Why do more and more people have credit card debt?
A Personal Financial Health Story
Instead of listing every reason for this trend, let’s focus on a human element. I remember my first job out of grad school in Los Angeles, making about $30/hr while working 45 hours per week. Going with the trend, I got a nice apartment, ate out most meals, and spent money freely. I had no idea how much I was actually making and thought I could just work more if needed. I didn’t care about a 401k.
Then, I was out of work. Things progressed quickly, and I couldn’t pay my financial obligations. I had to ask my parents for money and eventually moved back home. At the same time, I went into debt, and my credit took a hit. I was deeply embarrassed, thinking I couldn’t achieve anything in life because I couldn’t manage my finances.
In the end, I was lucky. My family supported me, my partner helped with rent, and I quickly got out of the hole I dug myself into. Many people can’t say that.
The Importance of Financial Education
I never learned how to budget. I learned to get A’s on physics exams. Even if I learned the basics of financial literacy in school, who’s to say I wouldn’t end up in the same hole? You must want to learn before you begin. This is why many apps and tools haven’t taken off. These resources are useful only if you’re ready to start and willing to change.
Just like picking up a new skill, it takes time to grow financial skills. It requires a mindset change. Reviewing your financial situation isn’t easy. You can either ignore it or choose to improve it. The first step is to create a picture of your financial situation. Know how much money you have and whether it’s going up or down. Once you know where you are, you can plan to improve it. Here’s a link to a website that offers free spreadsheet templates and is a great start!
Free Resources for Financial Support
And if you need help with that, just know you’re not alone and you can do it. There are a number of free resources out there, wherever you are, that can provide you support:
- Local Debtors Anonymous Support – Debtors Anonymous
- For Individuals
- For Businesses
- Free resource for Financial Coaching – Operation Hope
- Getting out of debt free resource – NFCC
- Financial support free resource – Credit.org
If you’re interested to learn more, please continue reading and follow along as we learn more about financial health.
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