2022 is the year that financial wellness comes of age. The New Year welcomes us with the opportunity to change the way we think and feel about money. It is a fortuitous time for the financial community to examine people’s emotional and behavioral relationship with their money, meet them where their money and better understand that money is the number 1 stressor. The American Psychological Association (APA) states that “regardless of the economic climate, money and finances have remained the top stressor since our survey began in 2007”.
After a deep period of hibernation, 2022 presents a post-pandemic revelation in the Wellbeing of Mind, Body, Family, and Financial Wellness. The vulnerability of ones’ personal health and financial resiliency of their household, continues to stay top of mind in the wake of the post covid aftermath as ongoing concerns regarding the loss of income and loved ones, continue to weigh heavily in every household around the world.
The aftermath of the pandemic has created feelings of economic uncertainty and a significant increase in feelings of anxiety, and isolation. The year of 2022 is a great opportunity to reconnect to others and focus on the Financial Wellbeing of the individual and their family. Termed by the World Economic Forum (WEF) as the “great resignation,” many people are taking the well-being of themselves and their loved ones quite seriously.
The pandemic of financial illiteracy is global as the S&P Financial Literacy Survey (2014) reflects that only 67% of adults worldwide are financially literate and that this percentage drops significantly by gender, socioeconomic levels, and race. This observation continues to be affirmed study after study.
Despite the availability of information and resources available on financial education, there has been minimal impact on making better money choices. We are not becoming more financially literate. In fact, this overall financial illiteracy makes many people primed to make poor planning and investment decisions. We need to go beyond financial literacy and consider total financial wellness.
It is important to consider what our personal money story is and how it impacts our financial decision-making. Just like tracing your family roots, you can certainly find the origins of your money story by thinking about how the topic of handling money was discussed in your family and by whom. In fact, this is the DNA in which you determine your personal definition of Financial Wellbeing and Financial Security and your Money Story.
A big reason we do not stick with budgets and saving plans is the same reason we do not stick with diets. Feeling shamed about not being able to budget and put money aside for a “rainy day”, which makes us not want to talk about it. You start to “self-loathe” knowing that you should not have bought those expensive shoes but paid down more on your high-interest rate credit cards as just one example.
How do we keep from feeling bad about our money decisions? We need to recognize that while it may sound great to give up our daily $5 coffee, it will also deny us pleasure. If we produce a compromise such as only buying coffee out three days a week, we can have both by having something that brings us joy and save $20 a week. It is about creating a habit that provides a balance that we can stick with for the long term.
The financial services industry tends to be built upon complex products with extensive jargon, which makes us too embarrassed to ask for an explanation, for fear of looking ill-informed. We can overcome being overwhelmed by “moneysplainin” by learning the terms, definitions, and skills required by becoming more financially literate.
Here is what financial wellness looks like:
Having control over one’s finances in terms of being able to pay bills on time, having manageable debt, and being able to make ends meet.
Having a financial “cushion” against unexpected expenses and emergencies.
Being on track to meet financial goals such as paying off one’s student loans within a certain number of years or saving a particular amount towards one’s retirement.
Being able to make choices that allow one to enjoy life—such as taking a vacation, enjoying a meal out now and then, going back to school to pursue an advanced degree, or working less to spend more time with family.
It is time to meet people where their money is. This will help us better understand our emotional relationship with money across all life cycles, and to comprehend how we can make more informed financial decisions.
We are pleased to introduce the Wellness 365 podcast which is a collaboration with Females and Finance. We are grateful to Paperwork for being our lead sponsor and proud to announce that this podcast will launch in early 2022.
The Wellness 365 Podcast features conversations with renowned financial wellness advocates, therapists, nationally acclaimed behavioral scientists, and technology leaders who are changing the money conversation through an empathetic approach with a focus on promoting diversity and inclusion. We will be discussing what really matters to obtaining financial wellbeing through content, coaching, and conversation throughout all stages of life. In these challenging times, The Wellness 365 Podcast takes a comprehensive approach to well-being to include financial, mental, physical, behavioral, and emotional viewpoints of acclaimed subject matter experts.
Financial wellness is not only an opportunity, but also our obligation. Money touches all parts of our lives. Let us change the way we think about money. Join us in making 2022 the year of financial wellness revelations.
By Keena Pettijohn and Tony Steuer