Summary: 5 Steps to Financial Wellness

Personal Finances | InspireHer: Plancorp Women’s Initiative

 InspireHer By: InspireHer
Women's Initiative founder Sara Gelsheimer shares her personal experience with giving.

We strive for wellness across all aspects of our life. We take the steps necessary to be well: we eat healthier, we take the stairs – not the elevator, sometimes, and we even take time to focus on ourselves. All of these things are immensely important to our wellness, but we tend to miss a piece. That piece is what we call Financial Wellness.

We spend our time focusing on our mental and physical wellness. Yet, one of the most prominent stressors in our lives is our money and finances. During our recent Lunch and Learn event, we laid out the five steps we think are the start to becoming financially well. For those who were unable to attend, we summarized the steps below.

Step 1: Manage Your Budget

We get it. Almost everything we read starts with managing a budget. That doesn’t make it any less important. The caveat is: we don’t want you to create a budget and follow it down to the cent and tie yourself to something you learn to resent. Instead, find what works for you and adjust the budget as needed. Consider reverse budgeting—it is less about knowing what you can spend and more about knowing how much to save.

Step 2: Know Your Advisor.

Don’t be afraid to ask questions like, "Are you required to act in my best interest?," "How do you get paid and by whom?" or "Are you licensed and/or certified?" No matter how long you have been working with your advisor, he or she should be able and willing to answer such questions. Also, know the type of firm with which your advisor is affiliated. There are key differences between financial firms: Compensation, Standard of Care, Required Licensing and Primary Services.

Step 3: Stay Disciplined.

We are very emotionally tied to our money. Rightfully so. Our money means so much more to us than a status. It means that we can travel the world or fund our children’s educations. But when we let our emotions drive our investment decisions, we suffer.

Essentially, our emotions tell us to buy high (when the market is up) and sell low (when the market is down). However, markets reward investors who control their behavior and stick to their plan. The most important thing your financial advisor can do for you is take the emotions out of investing, helping you stay disciplined.

Step 4: Execute an Estate Plan.

One of the greatest gifts you can leave for your loved ones is a well-executed estate plan. Communicating your wishes through your estate documents allows your loved ones to easily manage your estate and focus on being with loved ones. After you have executed your documents with an attorney, it is important to take the necessary steps to implement your plan including retitling your assets, designating the appropriate beneficiaries, and making sure the important people in your life know their roles and where your documents are located.

This worksheet will help you communicate the most important information to your loved ones should something happen to you.  And lastly, executing estate documents (particularly healthcare powers and living wills) are important for your adult children as well!

Step 5: Give.

There are several great ways to make monetary contributions to charity without writing a check. Consider making donations of appreciated stocks or mutual funds directly to a charity or to a Donor Advised Fund in order to avoid paying taxes on the appreciation.

Donor Advised Funds are especially great to use when you’d like to receive a charitable tax deduction today (especially during a higher than normal income year) but decide later how much to give to various charities. Other ways to give include charitable trusts or qualified charitable distributions. (More information on all these techniques will follow in a separate blog post soon!)

Moreover, giving doesn’t always have to involve a dollar sign. Volunteering reduces stress and anxiety (and is so much fun)! 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 in the giving process!

Thanks, again, to all of you who helped make our lunch and learn event such a success and for all of you for being a part of our Plancorp Women’s Initiative! We couldn’t be more excited about helping women find their financial voice. Stay tuned for our monthly blogs and future events.

Disclosure:

This material has been prepared for informational purposes only and should not be used as investment, tax, legal or accounting advice. All investing involves risk. Past performance is no guarantee of future results. Diversification does not ensure a profit or guarantee against a loss. You should consult your own tax, legal and accounting advisors.

This post was written by a member of the Plancorp Women’s Initiative, which strives to advocate for clients and women in the community by addressing topics specific to their financial lives. For more information about the Women’s Initiative and how you can get involved, email sara@plancorp.com or visit the Plancorp Women’s Initiative page.

Related Posts

The women of Plancorp are on a mission: to inspire financial confidence in all women through education and impactful support. By giving women a platform to be curious, inspire and be inspired, we hope to empower them to be more confident in their financial lives. More »