5 Steps to Boost Your Financial Wellness

When you feel confident in your financial situation and secure about your financial future, you can achieve financial wellbeing that may lead to reduced stress and improved mental and physical health. For example, more than half (51%) of Americans report “money and finance” as their top source of stress and only 30% report good financial health, according to one survey.

Growth Savings customers report higher rates of financial wellness. In our recent customer survey, 61% of respondents said they manage their money very well or extremely well. Achieving financial wellness isn’t about earning a specific income or reaching a particular net worth. It’s about developing sustainable habits and strategies that create long-term financial stability and peace of mind. Consider these five components of financial wellness that Growth Savings customers rely on.

More than six in 10 (62%) of respondents to a recent Forbright Bank customer survey reported that they have improved their financial wellness by budgeting.

Understanding where your money goes each month is the first step to effective money management. A well-crafted budget serves as your financial roadmap, helping you track income, expenses, and identify areas for improvement. You can do this with a budgeting app or your own personal system. For example, Growth Savings customer Gary B. says he uses an “Excel spreadsheet to track all monthly expenses.”

Start by listing all sources of income and categorizing your expenses into fixed costs like rent and utilities, variable expenses such as groceries and entertainment, and financial goals like saving and debt repayment. One popular budget format, the 50/30/20 rule, suggests allocating 50% of after-tax income to needs, 30% to wants, and 20% to savings and debt repayment, but these percentages should be adjusted based on individual circumstances.

Without specific financial objectives, it’s difficult to make meaningful progress toward financial wellness. Half of the respondents to our customer survey said that having clear goals has helped them improve their financial wellness. “Clear goals and planning have been the most beneficial” for Growth Savings customer Katrina C.

It’s a good idea to set both short-term goals that are achievable within a few months to a few years, and long-term goals, which may span several years. Short-term goals might include building an emergency fund or paying off a credit card, while long-term goals could involve saving for a home, funding children’s education, or planning for retirement.

Having clear targets helps you stay motivated and makes it easier to track your progress.

Paying off debt was the highest ranked strategy for improving financial wellness, with 73% of Growth Savings customers selecting it. One respondent, Larry M., says he’s achieved financial wellness by “borrowing only for essentials and never carrying a credit card balance.”

High-interest debt, particularly credit card debt, can undermine financial wellness by creating a cycle of payments that primarily cover interest rather than principal. If you have high-interest debt, you may be able to improve your financial wellbeing by developing a debt repayment strategy that works for your budget. Nishi P., another Growth Savings customer, has made it a “focus to be debt free as soon as possible [by] cutting unnecessary expenses.”

A savings plan is essential for meeting financial goals. Two-thirds of Growth Savings respondents (66%) said that having a savings plan has helped them improve financial wellness.

If you don’t have a savings plan, consider working to build an emergency fund that will cover three to six months of living expenses. When you use a high-yield savings account, you have access to your funds whenever you need them while also earning competitive interest rates.

After establishing an emergency fund, you can focus on other savings goals such as a vacation fund, home down payment, or major purchase. When you automate your savings by setting up regular transfers from your checking account, that helps you treat savings as a non-negotiable expense rather than an afterthought.

Finally, 67% of Growth Savings customers report that investing has helped them improve financial wellness. One respondent, Mark F., says he achieves financial wellness by “always looking for the best and safest return for my money.”

For many people, the best and safest returns are achieved with a combination of strategies that fit your appetite for risk. For example, Certificates of Deposit can provide low-risk, long-term investments, and high-yield savings accounts provide competitive interest rates with flexible access to your funds. If you have access to an employer-sponsored retirement plan, that can be a good place to allocate the amount you’re comfortable risking in the market, especially if your company offers matching contributions. Starting early and remaining consistent can allow compound interest to work in your favor over time.

Financial wellness is achievable for anyone willing to commit to disciplined planning and consistent action. By implementing these strategies and maintaining focus on your long-term objectives, you can build a strong financial foundation that may provide security and reduce stress.

Disclaimer: This article is for general information and education only. It should not be considered financial or tax advice.