It’s Financial Literacy Month, a time to reflect on financial wellness.
April is officially Financial Literacy Month. While this could be one of the most challenging times we may face, it may also be a time to reflect on what financial wellness really means.
What is the difference between financial literacy and financial wellness? According to Investopedia’s definition, financial literacy is “the ability to understand and effectively apply various financial skills,” such as budgeting or investing.
Financial wellness on the other hand is a much broader concept. It is understanding the personal values and concepts that help us to feel financially secure. It is a very individual mindset, and how we feel about money can have significant influence on how we manage money. Additionally, the perception of feeling financially secure can also be framed by other important influences such as family background, cultural impacts, and socioeconomic status.
How can we find financial wellness?
Financial wellness can be found in two phases. The first is tackling short-term goals. This includes concepts such as building an emergency fund, paying off debt, automating bill payments, lessening the use of credit cards, and simply understanding how short-term purchasing decisions could impact long-term goals.
The second phase is creating and managing goals which help make a positive impact for the long-term. This phase includes concepts such as automatic contributions to retirement accounts, creating a plan towards becoming debt-free, or the most effective way to save for a child’s college tuition.
The key to financial wellness starts by defining what it means to you, then finding the tools you need to help you achieve it. Financial education is an important component to finding financial wellness, so consider ideas such as following different financial blogs, trying out different types of financial calculators, or even talking with a financial advisor for a second opinion.
Understanding your personal vision of financial wellness can help empower you to make educated and confident financial decisions. April 2020 will be a particularly important Financially Literacy Month. Now is the time to reflect on what would help you to feel financially secure, and then taking the steps (even the small ones) to finding financial wellness.
Investment Advisory Services offered through BCJ Capital Management LLC., an (SEC) Registered Investment Adviser. Information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed, and past performance is no guarantee of future results. For specific tax advice on any strategy, consult with a qualified tax professional before implementing any strategy discussed herein.
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