7 Tips For Improving Your Financial Wellness This Year


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In theory, financial wellness is something we all want. But it also sounds a little vague and potentially complex. What exactly does it mean? And, how do you achieve it?

Simply put, financial wellness is the ability to lead a successful financial life. It’s being able to meet your basic needs and manage your money for both the short- and long-term. You can enhance your financial wellness by improving various aspects of your personal finances, including budgeting, saving, investing, managing debt, and planning for the future.

Surprisingly, achieving financial wellness isn’t just about having a substantial income; it’s about how effectively you manage and utilize your resources to build a secure financial future. That means anyone can get there, no matter where they are in their financial journey or how much money they have (or don’t). Read on for a closer look at financial wellness, including what it is, why it matters, and how to apply the basic elements of financial wellness to your own life.

What Is Financial Wellness?

Financial wellness describes a condition in which you can manage your current bills and expenses, pay your debts, weather unexpected financial emergencies, and plan for long-term financial goals like saving for retirement and a child’s education. As defined by the Consumer Financial Protection Bureau, financial well-being (another term for financial wellness) is a condition in which “a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow them to enjoy life.”

Just like overall “wellness” requires adopting practices — like exercising more and eating healthier foods — to help you live a better life, financial wellness is about adopting everyday money habits — like budgeting and saving — to secure your financial stability and freedom. Also like overall wellness, financial wellness is not an end state or final destination but, rather, a way to live day to day.

The Four Elements of Financial Wellness

Financial wellness is often broken down into four key areas of your personal finances. While these elements can overlap, and one can affect another, you can achieve greater results by bringing each under control. By addressing each of these pillars of financial wellness, you can start improving your financial well-being.

1. Budgeting and Financial Planning

Creating a budget that aligns with your income, expenses, and financial goals lays the foundation for financial wellness. Budgeting enables you to allocate resources efficiently, prioritize expenses, and plan for short- and long-term financial goals.

2. Savings and Emergency Funds

Establishing a habit of creating and maintaining an emergency fund to cover unforeseen expenses allows you to build financial security. Having savings acts as a safety net during emergencies and ensures financial stability, since you won’t have to rely on high-interest credit cards or loans in the event of a financial set-back.

3. Debt Management

Effectively managing long-term debt, and eliminating high-interest consumer debt, are vital components of achieving financial well-being. This frees up funds that can then go towards savings and investing and, in turn, help reach your financial goals.

4. Investing for the Future

Investing is a key underpinning of financial wellness because it allows for wealth-building and long-term financial stability. When it comes to reaching your retirement goal, saving as much as possible and starting as early as possible can be keys to success.

7 Tips to Improving Your Financial Wellness

Maybe you don’t meet the definition of financial wellness right now. But that doesn’t mean you can’t get there. What follows are seven relatively simple steps that can help you improve your current and long-term financial health and security.

1. Set Clear Financial Goals

Building financial wellness requires coming up with systems for spending, savings and investing. But before you can focus on specific habits and strategies, it helps to have a sense of what your financial life is like now, and where you want it to be months and years down the road.

You may want to jot down some specific and realistic objectives, such as going on a vacation in three months, buying a house in two years, and being able to one day retire. Having clear short-, mid-, and long-term objectives can help you create a roadmap towards achieving them.

2. Create and Stick to a Budget

To achieve your goals, you’ll need to develop a realistic budget that considers your monthly income and expenses and also allows you to put some money towards savings and debt repayments (beyond the minimum) each month.

A budget is simply a plan for how you’ll direct funds toward all areas of your financial life, such as necessary expenses, discretionary (“fun”) purchases, debt payments, personal savings goals, and investing for retirement.

There are all different ways to budget — the best approach is the one you’ll stick with. One simple and popular budgeting framework is the 50/30/20 rule, in which you divide your monthly take-home income into three categories, spending 50% on needs, 30% on wants, and 20% on savings and extra debt payments.

3. Pay Yourself First

A simple way to make sure you achieve your monthly savings goal is to automatically transfer a set amount of money into a savings account each time you get paid — in other words, pay yourself first. If you wait to see what’s leftover after you pay your bills and do your shopping, you may not have much — or anything — to set aside.

To get started with saving, you may want to open a dedicated savings account then set up a recurring transfer from your checking account into that account on a set day each month (ideally, right after you get paid). You can base the transfer amount on the savings goal you set out in your budget.

If you want to earn a high rate and pay the lowest fees on your savings, consider storing your savings in an online account. Without the added expenses of large branch networks, online banks are typically able to offer more favorable returns than national brick-and-mortar banks.

4. Build an Emergency Fund

If you don’t have one already, you’ll want to build an emergency savings fund that covers at least three to six months’ worth of living expenses. (If you’re self-employed or work irregularly, you may want to aim for six to 12 months’ worth of expenses.) This gives you a cushion should you lose your job or get hit with a large, unexpected expense — like a medical bill or major car or home repair.

Ideally, you’ll want to keep this money separate from your spending and other savings in an account that is accessible but pays a competitive yield, such as high-yield savings account or online savings account.

5. Protect Your Assets

While the emergency fund provides you with some protection, insurance provides more security in other situations. You’ll want to make sure you have adequate coverage when it comes to health, home, and auto insurance. This can offset large, sudden and unexpected expenses and losses, and reduce the possibility of going into debt.

You may get your health insurance through your employer. But with home and auto insurance, it often pays to shop around to find the best deal.

6. Pay Off High-Interest Debts

If you’re paying only the minimum on your credit card balances, you may be spending thousands on interest. That leaves you with a lot less money to put into savings or investments to grow your wealth. Coming up with a plan to knock down — and eventually eliminate — high-interest consumer debt will help you save money in the long term and improve your overall financial health.

There are a number of strategies for reducing debt. One is the debt avalanche method, which prioritizes paying down your debts in order of the one with the highest interest rate to the one with the lowest, while still making the minimum payment on the other each month. Another approach is the debt snowball method, which involves paying down your debts in order from largest to smallest, while continuing to pay the minimum on the others each month.

7. Start Investing

The key to building a nest egg large enough to live on in retirement is to start investing regularly as early as you can. Even if you have a low salary and can only afford to put a small amount into your retirement account each paycheck, that money will go a lot further if you start now. That’s thanks, in part, to the power of compound interest, which is the interest your interest accumulates.

If your company has a 401(k) or other retirement savings plan, consider contributing a portion of each paycheck into that account. If your employer matches a portion of your contributions, even better — that’s free money toward your future.

What’s the Difference Between Financial Wellness vs. Financial Literacy?

Financial wellness and financial literacy are interconnected concepts, but they are not the same thing.

Financial wellness involves the overall state of a person’s financial health, encompassing their behaviors, attitudes, and actions towards money management. It includes actions like budgeting, saving, investing, and debt management. Achieving financial wellness requires applying financial knowledge effectively to attain financial stability and security.

Financial literacy, on the other hand, refers to possessing knowledge and understanding of financial concepts and principles, such as budgeting, investing, loans, and credit management. While financial literacy is essential, achieving financial wellness involves not only understanding these concepts but also implementing them effectively to manage finances and achieve financial goals.

The Takeaway

Financial wellness is about more than just the numbers in a bank account — it’s a holistic approach to managing your money that encompasses various elements of personal finance. People who are financially well can comfortably pay their bills and manage their monthly expenses, without living paycheck to paycheck. They can also set money aside for emergencies, as well as short- and long-term goals. They’re quick to bounce back from any financial setbacks because they have the right resources and strategies in place.

By integrating budgeting, saving, debt management, and investing into your overall financial strategy, you can take proactive steps towards financial wellness, paving the way for a more peace of mind now, and a more secure financial future.

This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.

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11 Money Moves to Make ASAP After Your Spouse Dies

11 Money Moves to Make ASAP After Your Spouse Dies

As you navigate this difficult and uncertain time, it’s important to surround yourself with the right people. A spouse can be someone’s biggest source of emotional support, and you may need someone to provide that support where your spouse would have in the past.

Who that person might be won’t be the same for everyone. Perhaps you have a relative or a close friend who will be there for you. If necessary and if you have the means, you could also consider working with a professional therapist. For many people, the best solution will be to talk to a few people.

During this time of tremendous grief and stress, it can be wise to remember to take care of yourself. While there will be a lot to manage during this time, it’s important to get the rest, good nutrition, and the other forms of self-care that you need.


Taking the right steps after losing a spouse can help you avoid financial stress later. You should ensure you have documents in order, update records, and submit applications as necessary.

Here are 11 steps that will help with this endeavor and can provide a form of financial self-care as you get these matters under control.

1. Organize Documents

One of your first steps should be to gather and organize documents. You may need several documents, such as a birth certificate, death certificate, and marriage license. You will likely want to order or make several copies of each, as you might need them multiple times as you work through the steps ahead.

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You may have several financial accounts that need updating, especially if you and your spouse had joint finances. For example, you might have checking, savings, and investment accounts with both names. You might also have credit cards in both names. Contact the financial institution for each account and let them know it needs updating.


Review your spouse’s estate and will to see how their assets should be handled. Their planning documents, such as a will, are usually filed with an attorney or held in a safety deposit box. Contact the attorney with whom your spouse filed the documents to find the paperwork if necessary.

If they didn’t already have a will or estate plan, you can work with an attorney to determine next steps. State law will likely play a role in determining how assets are managed. Working with a lawyer skilled in this area can be an important aspect of financial planning after the death of a spouse.


Your spouse may have left retirement accounts, such as a 401(k) or individual retirement account (IRA). Check whether you are the beneficiary of your spouse’s retirement accounts. If you are the beneficiary of any of them, you will need to establish that with the institution holding the account. When that’s settled, it will likely be up to you to determine how to handle the funds.

While it is possible to transfer all of the money to your accounts, that isn’t always the best move. For instance, if you roll a 401(k) into your IRA and need the money before age 59½, there will be a 10% penalty on the withdrawal. There may be tax consequences, too.

In some cases, the best choice may be to leave the money where it is until you reach retirement age, if you haven’t already.


A spouse’s death can also create tax complications. For example, the tax brackets when filing as an individual are lower than those for married couples filing jointly. If you are still working, you might find yourself suddenly in a higher tax bracket, especially if you are the breadwinner. As a result, you might decide to reduce your taxable income by putting more money in a traditional IRA or 401(k).

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Another financial step to take after a spouse’s death: Review Social Security benefits if your partner was already receiving them. If you’re working with a funeral director, check if they notified the Social Security Administration of your spouse’s passing; if not, you may take steps to do so by calling 800-772-1213.

If you were both receiving benefits, you might be able to receive a higher benefit in the future. Which option makes the most sense depends on each of your incomes.

For instance, if your spouse made significantly more, you might opt for a survivor benefit.

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Survivor benefits let you claim an amount as much as 100% of your spouse’s Social Security benefit. For instance, if you are a widow or widower and are at your full retirement age, you can claim 100% of the deceased worker’s benefit. Another option is to apply for a survivor benefits now and receive the other, higher benefit later.

You can learn more about survivors benefits on the Social Security website.


If you had joint finances with your spouse, you should revise your budget. Chances are, both your expenses and your income have changed. While you may have lost the income your spouse earned, your Social Security benefits may have increased.

Your revised budget should reflect all these changes and reflect how to make ends meet in your new situation. This kind of financial planning after the death of the spouse can be invaluable as you move forward.

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As you review your budget, you may realize your living expenses will be too much to cover without your spouse’s income. Maybe you want a fresh start, or maybe you decide the big house you owned together is too much space these days. You might move into a smaller house and sell a car you no longer need.

Whatever the case, downsizing your life can be a way to not only lower costs but also simplify things as you enter this new phase. Financial planning for widows


If your spouse had a life insurance policy with you as the beneficiary, now is the time to file a claim. It might include a life insurance death benefit. You can start by contacting your insurance agent or company. Life insurance claims can sometimes take time to process, so it’s best to submit the claim as soon as possible.

Your spouse might have had multiple policies as well, such as an individual policy and a group policy through work. You might have to do some research and file multiple claims as a result. And, once you receive a life insurance benefit, you will need to make a decision about the best place for that money.


These steps might be a lot to process, and you might feel overwhelmed thinking about everything you must do. And you may not know the best way to handle the myriad decisions — benefits, retirement accounts, investments, etc. You likely don’t want to make an unwise decision, nor wind up raising your taxes.

Fortunately, some financial advisors specialize in this very situation. It can be worth meeting with one at this moment in your life, at least for a consultation. They can help you decide how to handle your assets as you move forward and help you do some financial planning for widows. That can help to both reduce your money stress and set you up for a more secure future.


For many people, there is nothing more emotionally challenging than losing a spouse. It can also be a financially challenging time as well. As you navigate this difficult time, there is no shame in seeking a helping hand. By taking steps like reviewing estate plans, filing a life insurance claim, and applying for survivor benefits, you can take control of your finances as you move into this new stage of life.

This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
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Communication of SoFi Wealth LLC an SEC Registered Investment Adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Liz Young is a Registered Representative of SoFi Securities and Investment Advisor Representative of SoFi Wealth. Her ADV 2B is available at www.sofi.com/legal/adv.

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