Financial Well-Being: Attaining Wallet Peace

Financial well-being is on everyone's mind.

A Consumer Financial Protection Bureau financial well-being survey revealed that Americans are divided along the financial well-being scale. No matter where you are on the path to financial well-being, you are not alone.

Here are some tips for recognizing and achieving financial well-being, an attainable goal at any stage of life.

Every stage of life comes with financial milestones: you start your first “real” job, you need a bigger house for your growing family, your oldest is getting ready to apply to colleges, or your retirement nest egg isn’t as big as you think it should be. With all of these financial pressures, is there ever a time when you can enjoy financial peace of mind? Sometimes financial well-being may seem elusive, but it is achievable at any stage of life.

What is financial well-being?

Many articles are devoted to physical and mental health, but fewer address how your finances can give you that feel-good vibe. Beyond just those exciting moments when you get a bonus at work or make your last car payment, well-being is a state of general happiness and contentment. Having a sense of well-being about your finances means you can:

1. Be in Control: Confident financial management is essential to financial well-being. It does not necessarily mean you have a lot of money, but it means you know how to manage your funds to cover your expenses. You pay your bills on time and don't have significant money concerns.
2. Be Resilient: Unexpected expenses, like medical bills or emergency home repairs, can disrupt your otherwise well-managed finances. Financial well-being means you have a safety net in place that may include emergency savings and insurance to help you pay those unexpected expenses rather than letting them become long-term crises.
3. Be Flexible: Making choices is one of the things that help you define yourself as an individual. You may pursue a hobby, have a big family, or become a world traveler. When you have the financial flexibility to make the choices that are important to you, you’ve achieved well-being.
4. Be Persistent: What you want in life is within reach if you are experiencing financial well-being. You will need to be patient and make some sacrifices, but you know you can achieve your desired goals, like a new house, a memorable family trip, or early retirement.

Attaining financial well-being can even reduce stress and positively affect your physical and mental health. A poor economic outlook can cause stress, leading to health issues and a downward spiral: The cost of healthcare for treating chronic disease and long-term health problems can detract from your financial well-being.

The journey to improve financial well-being.

Financial well-being is not just about money; it’s about wellness. And it is within reach for everyone, regardless of age, income level, or life circumstances – depending on your mindset and actions. It may take coordinating several aspects of your financial picture, which can look different for everyone. Consider making changes in these four areas to improve your financial well-being:

1. Budgeting: Keeping a budget is the most essential activity for attaining financial well-being. Tracking how you spend your money will help you gain control over your finances. Knowing where your money goes can help you make sound financial decisions to improve your overall financial well-being. Budgeting can be straightforward and require no special tools or investments, or you could take advantage of various tools designed to help you stay on track with your budget. Either way, learn how to budget and get started right away.
2. Preparing for Emergencies: An emergency financial plan should start with a savings fund. Be sure to put aside money to deal with unexpected expenses. You should also save enough money to cover three to six months of living expenses if you lose your job. Insurance products can be part of your emergency preparation since the right policy may help you recover financially from unexpected home, auto, or business losses.
3. Borrowing Strategically: You can use credit to get more credit, which could improve your overall financial picture. The key is to make wise choices about borrowing and always protect your credit score. Strive to keep your debt-to-income ratio below 36%, make loan or credit card payments on time, and pay off debts early when you can. Always try to save up about 20% of what you need for a large purchase before borrowing the rest. This practice will strengthen your borrowing position and can feel rewarding.
4. Planning: You can tackle those big life goals without extra stress by planning. It takes time to save the money you'll need for a down payment on a house or college tuition. By taking the time to make a plan, consulting your budget, and saving money over time, you can improve your financial well-being and achieve your financial goals at the same time. Planning and patience help you see that you can meet your financial obligations today while saving for your future plans.

Financial well-being doesn't have to be a dream. You can make it a reality and maintain it as a lifestyle. Contact your First United Bank relationship banker if you need help charting your path to financial well-being. They have the expertise to answer your questions and the financial instruments you may need to make financial well-being your way of life.