5 Steps To Financial Wellness

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This blog post was originally written by Sara Gelsheimer, Senior Wealth Manager CFP, AIF at Plancorp. Plancorp is a Scouted financial planning advisory and wealth management firm with over 40 years of experience, Plancorp has grown over the years by staying dedicated to one thing: their clients.

I think we’d all agree that achieving wellness in our lives is a priority.

We implement strategies for physical wellness, like exercising and eating healthy. We build mental wellness through self-care practices like journaling or meditation.

But an often-overlooked area is our financial wellness. One of the biggest sources of stress in our lives comes from money and finances. Below are five steps to consider as you work toward financial wellness.

Step 1: Manage Your Budget

It’s really easy to lose track of your financial goals and progress without a budget in place to plan your expenses and savings.  You can’t plan for what you can’t see or understand, so financial goals drift most when you’re in the dark.

We’re not saying create a budget and follow it down to the penny. That approach to budgeting will just lead to resentment.

Instead, we suggest finding a budget strategy that works for you and adjust it as needed. For many, the idea of reverse budgeting is more palatable.

Whatever strategy you choose, just make sure the basics are covered:

  • How much money is coming in (your income)
  • How much money is going out (your expenses, both expected and unplanned)
  • How much money is going toward your future goals (i.e. savings accounts)

Step 2: Know Your Advisor

When it comes to your relationship with a financial advisor, make sure you know the answers to questions like:

  • Are you legally required to act in my best interest?
  • How do you get paid and by whom?
  • What licenses and/or certifications do you hold?

No matter how long you’ve had this advisor relationship, they should be able and willing to answer questions like this.

Also consider whether they proactively reach out to you with updates and opportunities or if they only call to sell you something (or maybe they don’t call at all?).

These could all be signs it’s time to break up with your advisor and find a better fit.

Step 3: Stay Disciplined

There are a lot of emotions tied to money. Achieving our financial goals means we can travel the world, fund our kids’ educations, and build the life we envision. It would be unnatural if you weren’t emotional about that.

But when we let our emotions drive our investment decisions, specifically those around investments, our progress can suffer. Emotion-led investing can lead us to illogical strategies, like buying into the market when it’s high (i.e. letting our FOMO get the best of us), and panic-selling when it’s low to avoid potential loss.

In reality, markets reward investors who stick to a plan. The most important thing to do with your advisor is to separate the emotions from your investing strategies, which will help you stay disciplined and see more success.

Step 4: Execute an Estate Plan

It may not be fun to think about, but a well-executed estate plan is one of the greatest gifts you can leave for your loved ones. Communicating your wishes allows for easy estate settlement, so your family isn’t overwhelmed during an already difficult time.

Your estate planning documents should consist of powers of attorney, for both financial and healthcare decisions, advanced medical directives, wills, and more.

After you have established your estate plan documents with an attorney, make sure you retitle assets accordingly, designate beneficiaries, and let your loved ones know their roles in the execution of your plan and where they can find your documents. Consider creating an Estate Plan Memo – you loved ones will thank you!

Step 5: Give

If your long-term financial plan doesn’t include a strategic giving component, you may be missing out on something that will fill your emotional cup as well as be a win-win for both the charities you support and your financial plan.

Everyone’s plan will look different, but it may be worth considering donations of appreciated stocks or mutual funds directly to a charity or to a Donor Advised Fund to avoid paying taxes on asset growth, allowing more of your hard-earned and invested dollars to support great causes.

Other ways to give include charitable trusts or qualified charitable distributions, which you can learn more about in this blog post that outlines several strategies and considerations for charitable giving.

Giving doesn’t always have to involve a dollar sign. To find a volunteer opportunity that aligns with your passions, visit www.volunteermatch.org or pick up Carol Weisman’s book Raising Charitable Children for ideas on how to involve your children or grandchildren!

Financial wellness is just as important as physical and emotional wellness; but it can be overwhelming. Work with a trusted partner who can help through these 5 steps and be an advocate as your financial life unfolds. InspireHer is here to elevate your financial confidence and be a partner on your financial journey.

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