Steps To Financial Wellness During Financial Literacy Month

April is Financial Literacy Month! Given world events over the course of the past several months, there’s no better time to dive into understanding your finances and striving for financial health.

Defining Financial Wellness

• Financial wellness is usually defined as feeling secure when it comes to your money - both in the short and long-term. However, there is a wide range of how people relate to financial security, so your definition of wellness may differ from your neighbor’s. In fact, definitions of financial wellness may even be different between you and your spouse or partner.

There are a few questions to ask yourself when trying to determine what financial wellness means to you:

1. How big of a “safety net” or cash savings do I need to have to feel safe?
2. Does my job provide enough of an income to cover my expenses?
3. Am I in debt, and is paying off my debt a priority?
4. Do I have enough cash flow to cover non-essential expenses (like taking my spouse out to dinner) or short-term financial goals (like making a large purchase)?
5. Am I on track to meet long-term financial goals (like retiring by a certain age)?

What Action Steps Can You Take?

1. Start focusing on building an emergency fund of 3-6 months of living expenses. If this feels out of reach, start with saving up just one month of living expenses, and grow from there.
2. Automate bill payments, and be clear on when those payments will be taken out of your account. No surprises!
3. Automate payments toward your student loans and other lines of credit, and stop using credit cards when you can.
4. Sit down with your spouse or partner to determine your top 3-5 values. Look at how you’ve been spending your money for the past month - do your expenses match those values? If not, consider adjusting. For example, if you value time together, but are spending more money on lattes before work than you are on date night, adjust accordingly. 

Why It’s Critical to Take Control of Your Finances Through Education

Unfortunately, it’s rare that financial wellness is taught to children in America. While some programs do exist, they’re few and far between. People from families who were living paycheck to paycheck, or who came from a culture that didn’t include them in financial discussions as children are at a disadvantage. 

Key Takeaways:

1. Define what financial wellness means to you, and set your goals accordingly.
2. Take short and long-term steps toward stabilizing your financial life, and achieving your wellness goals.

*Scotia Capital Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. Wealth advisory and brokerage services are provided by ScotiaMcLeaod, a division of Scotia Capital Inc. For more information visit www.scotiawealthmanagement.com. ScotiaMcLeod does not endorse or promote any products or services on "Visioning Canada" or "Capital Market Update" which are hosted by Jensen Investment Management which is a personal trade name of Kristofer Jensen, Kaelan Jensen and Taytum Jensen.*